REPUBLIC OF ALBANIA AD HOC COMMITTEE ON THE SWITCHOVER STRATEGY Technical Secretariat

STRATEGY

ON

DIGITAL SWITCHOVER

Tirana 2011

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Introduction

International aspect of digital switchover

In the light of the new technological developments, it has been concluded long ago that an effective use of the frequency spectrum and the achievement of political objectives of any country, such as development of domestic market, competition, change and growth, may not be achieved by using a fractioned spectrum through old analogue technologies, but by introducing new digital technologies.

Switchover from analogue to digital broadcasting is a global process coordinated by the International Telecommunication Union (ITU).

The final deadlines for Region 1, where Albania is included according to the ITU regional division, are stipulated in the GE-06 Agreement.

The GE-06 Agreement was ratified by the Assembly of Albania by Law no. 9851 dated 26.12.2007 (Official journal no. 187, dated 24.01.2008, pg. 588).

The work on introducing new digital technologies in the European television broadcasting has begun long ago. The EU Council of Ministers adopted on 20 November 2003 "The Conclusions on the transition period from analogue to digital broadcasting", highlighting especially the different scale of development, which currently exists among the member states, as well as the fact that any intervention from politics to achieve this transition should be done mainly at the national level, considering the need for public support of this process.

Based on the decision of the International Telecommunication Union (ITU) in 2004, the Regional Conference of Radio Communication (RRC-04) was held, whose agenda included especially the issues of planning the frequencies for DVB-T through Europe and Africa, and in a large part of Asia. The second round of this Conference, RRC-06, was held in May-June 2006. RRC-06 adopted the GE-06 Agreement “On planning the terrestrial digital broadcasting services in parts of Region 1 and 3, in the frequency band 174-230 MHz and 470-862 MHz”.

Part of the agreement was the Digital Broadcasting Frequency Plan including the Albanian Digital Broadcasting Frequency Plan.

The agreement foresees 2015 as the year of the complete switch off of the analogue broadcasting, which obliges all signing states to respect the deadlines of this international decision.

A large number of coordinating, bilateral and multilateral meetings between neighbour countries have been organized to achieve the GE-06 Agreement and finalise the frequency plan attached to this agreement, whose final aim was equal use, not a discriminating use, of the limited resources of the frequency spectrum in order for the digital broadcasting to meet the requirement of each country, both in quantity and quality, and not cause damaging interferences in the broadcasting of the respective state.

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EU member states have set objectives for digital switchover and freeing the frequency spectrum. To stimulate the switchover, the European Commission approved on May 2005 a Communication on "Accelerating the transition from analogue to digital broadcasting". This document foresees that analogue broadcasting in EU member states will be finally switched off during the period 2010 – 2012, by examining the main issues caused by the migration from analogue to digital system and identifying the various advantages provided by digital broadcasting. This document explains the circumstances that justify the intervention of politics in the digital switchover process.

This Communication refers also to the need of the member states to establish a stable regulatory environment, which encourages investment and offers greater flexibility of the conditions accompanying digital switchover. It emphasises the importance of the spectrum management in the digital switchover, proposing, among others, a narrower international coordination and new allocation and assigning mechanisms.

It invites the member states to make sure that political interventions are transparent, justified, adequate, implemented in due time and indiscriminately, stating also that “the period of digital switchover, is a comprehensive process with social and economic implications, being at the same time a big challenge for the industry, users and state structures”.

European citizens, including the Albanian citizens, should obtain direct benefits from this process in the form of a quicker access to new technologies and lower prices on communications.

While the digitalization process affects the majority of the Albanian population due to its inevitable consequences, especially the technical, economic and social ones, the state plays an indispensable place in this process.

In order to face such challenge, it is deemed necessary to identify and take concrete steps and measures in this direction. The experience of other countries, which have already initiated this process, shows that a successful switchover requires the drafting of a strategy or comprehensive document in order to properly address the present and future challenges.

While not only in Europe, but also in our region there are countries that have finalised the digital switchover, Albania remains one of the last countries where this process has not even started yet in an organised manner. Every further delay endangers the process, which is one of the international commitments of the Albanian State. Achievement of the transition from analogue to digital broadcasting is part of the obligations in terms of the EU requirements related to Albania's adherence to it.

Scope of the Document

The aim of this policy document is to perform the switchover process from analogue to digital broadcasting by informing and preparing in due time all the interested players in order for this process to be effective and positive.

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Since the society nowadays relies on advanced electronic communication, the demand for radio frequencies is continuously increasing. The frequencies spectrum is a primary support element in electronic communications, regardless of whether it includes mobile telephony, internet wireless access or radio and television broadcasting.

Today’s rapid technological developments and the convergence of electronic communications, media capacities and electronic equipment are creating a dynamic environment which is making the spectrum an ever restricted source.

In case the spectrum management does not go in parallel with such developments, thus if traditional methods do not change, our society shall be deprived of enjoying the fruits of this new dynamic environment.

The vigorous technology changes in the field of media, the reality of digital television in Albania and the need to update the legislation in force in line with the best European standards and practices in the field, has served as a powerful impulse in drafting such a document, aiming at creating a long-term environment and vision of regulatory approaches in the digitalization process.

Content of the Document

The digital switchover strategy anticipates the main objectives and principles of the switchover, defines the role of the state and the respective state administration structures for creating the necessary conditions for the digital switchover, provides an assessment of the existing technical and legal situation of the Albanian audio and visual landscape and defines the steps, procedures and timelines for completing the switchover process within 17 June 2015.

The switchover from the analogue to the digital broadcasting shall play a fundamental role in the overall development of the information society since the digitalization of information shall enable the collection, processing and flow of larger quantities and better quality data.

Digital broadcasting systems shall increase services offered to the public, extend open choices for the users and shall also offer wider access to the information society services, which makes the economic and social implications of this process very important.

This document has been prepared based on the analysis of the current situation as well as on the best international practises in the field, considering the interests of the Albanian customers, the financial aspects of the switchover, network capacities, broadcasting obligations as well the current broadcasting situation in Albania.

This document takes into consideration the benefits of digital switchover as well as the various guidelines, conclusions, recommendations and debates held at the EU level on the values and benefits of the digital switchover.

The present document does also set the path and the stages to be followed during the digital switchover, the accompanying legal, institutional and technical steps to be undertaken as well as the need for collaboration and coordination with all the involved players.

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Another positive element of this strategy document is the setting of regulatory instruments especially with regards to public policy interventions (for instance, consumers’ information campaigns or the defining of the Albanian public television (TVSH) role in the digitalization process); regulatory measures or financial support mechanisms.

The realization of this switchover in compliance with the objectives set in this document, shall further encourage the development of the Albanian media market, provide more benefits for the consumers and the persons in need in particular; it shall enable a more effective use of the network capacities as well as a larger capacity spectrum, especially due to the closure of analogue televisions.

Development of a Public Consultation Process

Digital switchover is a very important process for both the operator and the public. Its success depends on the ability of the institutions to work along in this process and coordinate its various players.

The successful completion of digital switchover requires above all cooperation. This important process cannot be completed by one single institution. It involves a wide range of partners including the state, legislative and executive structures, media related non-governmental organizations, the operators and the citizens and consumers themselves.

This is the reason why the National Council on Radio and Television (NCRT) carried out a wide public consultation and collaboration process with as many interested players as possible. This public consultation approach was not only in line with the European practice but was also mandatory by the respective EU policy documents. The European experience shows that a harmonized transition to digital broadcasting requires a wide consensus among the interested players especially in the process of approving a strategy of general interest.

In the framework of a wide public consultation, the NCRT in collaboration with international partners such as the OSCE, undertook a range of measures including online counselling, hosting of several national and regional meetings and conferences aiming at getting the operators familiar with the challenges of this process and also at getting their input which would enable to have clearer ideas and more detailed objectives for a successful fundamental transformation of the Albanian electronic media landscape.

The ideas, opinions and recommendations provided by the interested players, mainly the radio and television operators, have been concrete contributions and a real help in defining the steps of this process. This consultation process has enabled the identification of the best ways of collaboration with the operators as the key players in this process for building the local, regional and national platforms which shall give priority to the support of the existing programs and then the general or new thematic programs depending on the market needs and the preferences of the audience.

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The main purpose was the knowledge of technology and the functioning of the digital system and the related investments and costs according to the type of network to be built.

The contributions offered by all interested players are already an important part of this strategy document on digital switchover, including the experiences of those countries which have moved forward in this process as well as the European standards and best practices in this field.

Conclusion:

1. The transition from analogue to digital broadcasting is a process of national importance, and the most important one in the field of radio television broadcasting. 2. No delays may be allowed in digitalisation of the Albanian television operators (public and private), so that this process is achieved within the final deadline set forth by the GE-06, June 2015. 3. The remaining time does not allow for ART and the private operators, which will receive licenses for national, regional and local coverage, to work with different plans or agendas. The work done for a "digital islands" coverage of the territory will require all operators, no one excluded, to coordinate the works in a "synchronic" manner, to be able to achieve the switchover (switch off of analogue broadcasting) at the time decided by the respective institutions, according to the action plan attached to this document. 4. Even in 2015, due to the rough terrain, no Albanian operator will be able to cover more than 90-95% of the country's territory. For the remaining part it will be needed to foresee satellite coverage, as done in other countries. 5. In order to achieve a successful digital switchover, the engagement of the Government is required, as well as use of state subsidy schemes.

TERMINOLOGY

1. “Receiver device” mean the set of electronic equipment that makes possible reception and transmission of radio-television broadcasts for the users and any other equipment or program linked with it for this purpose. 2. “Authority of Electronic Communications” or the AKEP means the regulatory authority responsible for electronic communications pursuant to the definitions of Law No. 9918, dated 19.5.2008 “On Electronic Communications in the Republic of Albania”. 3. “ HD High-definition television (or HDTV)” s video that has resolution substantially higher than that of traditional television systems (standard-definition television, or SDTV or SD). HDTV has one or two million pixels per frame, roughly five times that of SD. 4. “Allotment”: The geographical area covered by a digital television network with one frequency (SFN-Single frequency Network). 5. "Radio-television broadcasting coverage area” is the territory in which the intensity of the signal meets the requirements of signal reception quality, laid down in international acts on radio-television broadcasts. 6. “Licensing area” the territory covered by a radio television broadcasting service from a certain operator assigned by the Regulatory Authority in the respective license.

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7. “Broadcasting capacity”: the quantity of programme services and other services that may be supported in one digital network. 8. “TV Program" means a set of moving images with or without sound, constituting an individual item within a schedule or a catalogue established by a media service provider and the form and content of which are comparable to the form and content of television broadcasting. Examples of programs include movies, sports events, situation comedies, documentaries, children’s programmers, and original drama; 9. “Radio program” means the totality of audio messages constituting an individual element within a list or catalogue created by the service provider, whose form and content are comparable with the form and content of a radio broadcast. 10. “Analogue programme” a programme supported in an analogue broadcasting network. 11. ‘Digital programme” programme supported in a digital broadcasting network. 12. “Terrestrial equipment for distribution of a television broadcasting service” means devices for the distribution of such a service through the air, through land installed transmitters. 13. Multiplex” is a technical device that converts analogue into digital signals, combining them into one digital output of data flow. 14. “Multiplex platform” is the technical infrastructure for terrestrial distribution and combination of digital programs and supplementary services, included in the digital data flow. 15. “Radio” A general term applied in the use of radio waves 16. “Radio wave” or hertzian wave: Electromagnetic waves with frequencies lower than 3 000 GHz, spread in space without artificial guidance. 17. “Frequency”: The number of fluctuations per second of the electromagnetic waves. 18. “Assignment of a frequency (of a radiofrequency or radiofrequency channel)”: The authorisation granted by a public authority to a radio station to use a radiofrequency or a radiofrequency channel in certain conditions. 19. “Multiplex operator” means the natural or legal person who provides the technical infrastructure for terrestrial distribution and aggregation of digital programs and supplementary services included in the digital streaming of data. 20. “Media Service Provider means the natural or legal person who has editorial responsibility for the selection of audio and/or audiovisual content of the audiovisual media service and who determines the manner in which it is organized. 21. “Electronic communication network” means the systems of broadcasting, and if that is the case, the commutation systems or routing systems and other resources, which allow the commutation of signals through conductors, radio, optical means or other electromagnetic means, including satellite networks, fixed networks (with cycle commutation or package commutation, including internet) mobile terrestrial networks, the electric cable systems when they are used for the transmission of signals, and the networks used for radio television broadcasting, irrespective of the information transmitted. 22. “Provision of radio-television broadcasting service” is the provision of a structured program with the purpose of broadcasting or distributing like a radio-television service.

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23. “On demand audio and/or audio-visual service” means non-linear service provided by a media service provider at the moment chosen by the user and at his individual request on the basis of a catalogue of programs selected by the media service provider . 24. “Free broadcasting” means broadcasting without payment to the entity providing the service. 25. “Public broadcasting service” comprises broadcasting services of the RTSH without any payment. 26. “Audio broadcasting service” is a broadcasting service that distributes or airs news, audio, signs or signals with the purpose of their direct reception by the broad public; 27. “Audio-visual service program” means a service that entails a set of audiovisual programs of all kinds and which may be aired or distributed directly or otherwise for reception by the broad public. 28. “Simulcast” : Time period when the coexistence of analogue with digital networks is allowed. 29. “Terrestrial means for the allocation of a radio television broadcasting service” are the means for the dissemination of such service through waves. 30. “Terrestrial analogue broadcasting”: dissemination of the radio television broadcasting service through analogue means. 31. “Terrestrial digital broadcasting”: dissemination of the radio television broadcasting service through digital means. 32. “Digital platform”: the range of digital technical means used to support the programme services. 33. “Television broadcasting” means a linear radio television service provided by a media service provider for simultaneous viewing of programs on the basis of a program schedule. 34. “Linear broadcasting” is the provision of audio and/or audiovisual program service for its simultaneous reception by listeners and or viewers. 35. “Non-linear broadcasting” means an audio and/or audiovisual media service provided by a media service provider for the viewing of programs at the moment chosen by the users and at their individual request; “Protected services” are: a) Audio and/or audiovisual broadcasting services and information society services that are offered on the basis of conditional access in return for payment; a. Provision of conditional access for services cited in letter “a’ of this point also constitutes a protected service. 36. “Conditional access” means the taking of technical measures and/ or arrangements, so that access to protected services in a comprehensive/clear form is made available through a preliminary individual license. 37. Conditional access device means any device or program (software) designed or adapted to provide access to a protected service in a clear and comprehensive form. 38. “Audio broadcasting service” a broadcasting service which spreads or disseminates audio signs or signals to be directly received by the general public. 39. “Audiovisual programme service” a range of audiovisual programmes of any kind which are spread or disseminated directly, or not, to be received by the general public.

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40. “Television broadcasting” a linear broadcast of a radio television service provided by the media service provider to enable simultaneous view of programmes based on a programme scheme. 41. “Public broadcaster” the public provider of media services (RTSH) 42. “Satellite broadcasting” the media service broadcast via satellite. 43. “Radio television broadcasting service” a broadcasting service which spreads or disseminates visual signs to be directly received by the general public. 44. “Coverage” coverage of a certain territory by a broadcaster's signal. 45. “Satellite digital platform” the range of satellite digital technical means to support the programme services. 46. “Head End” the central link of a digital network where the multiplex device is installed. 47. “Decoder” the device that converts digital signals into analogue signals, to be received by the usual analogue receivers. 48. “Network” a range of broadcasting stations which cover a certain territory with signal.

Abbreviations

1. ITU - International Telecommunications Union 2. GE-06 – Regional Agreement of Radio communications on planning the terrestrial digital broadcasting services in parts of Region 11 and 32, in the frequency band 174-230 MHz and 470-862 MHz (Geneva 15 May – 16 June 2006). 3. RRC-06 – Regional Radio communications Conference (Geneva 15 May – 16 June 2006) 4. VHF - Very High Frequency (30 – 300 MHz) 5. UHF - Ultra High Frequency (300 – 3000 MHz) 6. DVB-T - Digital Video Broadcasting Terrestrial (DVB-T) is a terrestrial system defined by Recommendation ITU-R BT.1306 of the ITU as "Digital System B”. 7. DVBT 2 - Terrestrial digital broadcasting system DVB-T. improved 8. T-DAB terrestrial service system, set forth in ITU-R BS.1114 Recommendation of the International Communication Union as "A Digital System". 9. DVB-H is a mobile digital broadcasting system. 10. MFN - Multi frequency Network 11. SFN - Single Frequency Network 12. Local SFN – digital network with a frequency for covering one allotment.

1 A region, which according to the ITU, includes mainly Europe and Africa. 2 A region, which according to the ITU, includes mainly the Asian countries. Page 9 of 83

13. HD High-definition television (or HDTV)” is the video signal that has resolution substantially higher than that of traditional television systems. (HDTV has five times more pixels per frame compared to traditional systems). 14. SDTV - standard-definition TV) – the video signal of the traditional television systems. 15. MPEG 2 – Vision compression system. 16. MPEG 4 – Advanced vision compression system. 17. TS (transport stream) – a signal containing television programmes and all the relevant information. 18. LCN - Logical Canal Number 19. MSO – Media Service Operator

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COMPLETE DIGITAL SWITCHOVER

I – CURRENT SITUATION OF DIGITAL BROADCASTING

1.1 The frequency plan for digital broadcasting in Albania

The Albanian Frequency Plan, approved by the GE06 Agreement, and ratified by the Assembly of Albania, provides the following:

 7 national coverages with DVB-T (Digital terrestrial television) in UHF band  1 national coverage with DVB-T in VHF band  2 national coverages with T-DAB (digital radio) in VHF band

In addition to national coverage, the plan also foresees local coverage:

 Tirana sub-allotment with 7 local coverages DVB-T in UHF, 1 coverage in DVB-T VHF and 2 coverages in T-DAB VHF.  Planning a number of frequencies for local coverage in some areas of Albania

Allotments3: 1. For DVB-T in UHF: 2. For DVB-T in VHF 3. For T-DAB in VHF (Digital radio)

3 Allotment: An area covering a broadcasting network by several broadcasters. When there is only one broadcaster, the allotment is the area covered by one Frequency (assignment) Page 11 of 83

Fig. 1.1 Types of allotments of the Digital Plan

1.2 Broadcasting capacity generated from the implementation of the Digital Broadcasting Frequency Plan

The following table (Tab.1) reflects the broadcasting capacity generated from the Albanian digital frequency plan. The table shows the frequency (channels) for each allotment. Lines of the same colour show the frequency (channels) combination of allotments to build a digital network MFN with national coverage. As it may be seen in the table, there is the potential to build a total of eight digital networks with national coverage. The table shows that based on the resources of the national digital frequency plan, the number of digital networks that may be established in Albania varies from 112 (if only local SFN networks are established) to 32 (8 national +24 local), if the aim is to maximise the number of national networks. In the second option, some areas (Shkodër, Lezhë, Tirana and Vlora) would be deprived of the right to establish local networks.

Tab. 1 Broadcasting capacity generated by the Albanian digital frequency plan

The following table (Tab.2) shows the additional coverage for Tirana and its suburbs.

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Tab. 2 Transmitting capacities generated from the Albanian Digital Frequency Plan for Tirana sub-allotment.

1.3 Analogue operators supported by digital platforms

The public broadcaster has not established any digital networks, but its program is being broadcast simulcast supported by the (unlicensed) Digitalb digital network. The other national private operators (Klan and Top Channel) are broadcasting simulcast supported by the Digitalb digital network. There are also some local operators whose programs are supported by digital networks, mainly Digitalb. The following table reflects the current situation of the simulcast broadcasting of the operators licensed as terrestrial analogue operators.

Analogue TV No. operators Status Area of coverage Platform

1 TVSH Public National Digitalb 2 TV Klan Private National Digitalb 3 Top Channel Private National Digitalb 4 TV News 24 Private Local (Tiranë – Durrës) Digitalb 5 TV Ora Private Local (Tiranë – Durrës) Digitalb 6 Vizion + Private Local (Tiranë – Durrës) Tring 7 TV Shijak Private Local (Tiranë – Durrës) Digital TV Shijak

Tab. 3 List of operators supported both by terrestrial analogue and digital networks

Note: With the support provided by the terrestrial digital platform “Digitalb”, the private local operators have expanded their coverage beyond their licensed area.

Some existing analogue operators are supported both by terrestrial digital networks, and satellite digital platforms:

Analogue No. TV Status Area of coverage Satellite platform operators 1 TVSH Public National Digitalb 2 TV Klan Private National Digitalb 3 Top Channel Private National Digitalb 4 TV News 24 Private Local (Tiranë - Durrës) Digitalb 5 TV Ora Private Local(Tiranë - Durrës) Digitalb 6 Vizion + Private Local (Tiranë - Durrës) Tring 7 Vizion + Private Local (Tiranë - Durrës) Digitalb

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8 TV TNSH Private Local (Tiranë - Durrës) Digitalb 9 TV Tirana Private Local (Tiranë - Durrës) Digitalb T 10 TV Alsat Private Local (Tiranë - Durrës) Digitalb Ta 11 TV BBF Private Local (Tiranë - Durrës) Digitalb Necessary digital No. Allotment Licensed area Total 12 TV Koha Private Local (Tiranë - Durrës) Digitalbnetworks 13 TV Kukësi Private Local (Tiranë - Durrës) Digitalb

b.4 List of operators supported both by terrestrial analogue and satellite platforms.

Note: National programmes include 2 RTSh programmes.

Note: With the support of satellite platforms, private local operators have expanded their coverage beyond their licensed area.

Conclusion: The existing programmes supported by (terrestrial and satellite) digital networks have helped Albanian viewers to learn how to use the digital technology, which leads to less expensive public information during the transition period.

1.4 Existing terrestrial analogue broadcasting according to allotments

Table 5 shows the situation of the licensed analogue networks in the Albanian territory, divided according to the allotments of the digital plan. This table serves to calculate the capacities of the digital networks needed to support the existing analogue program with standard quality (SDTV). This means that during the first stage of the digital switchover no programs based on high definition (HD) technology shall be used.

The capacities of the digital networks change according to the technology (DVBT or DVBT 2) and the signal compression standard (MPEG 2 or MPEG 4). The following table (Tab.5), shows the number of digital networks necessary to support all the existing analogue programs on these digital networks, according to the compression standard used. As it may be seen in the table, the best option which provides the most effective use of the spectrum, is the MPEG 4 system.

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Up to 1 Up to 4 Repeti MPEG MPEG National region regions tive 2 4 2 1 Shkodër 7 1 2 4 14 1 Network Network 1 1 Kukës - 1 - 4 5 2 Network Network 1 1 Dibër 2 - - 4 6 3 Network Network 2 1 Lezhë 3 5 - 4 12 Network Network 4 s 4 2 Tiranë 11 16 3 4 34 Network Network 5 s s 2 1 Elbasan 2 7 2 4 15 Network Network 6 s 2 1 Fier 5 5 1 4 15 Network Network 7 s 2 1 Berat 4 1 1 4 10 Network Network 8 s 2 1 Korçë 5 1 - 4 10 Network Network 9 s 2 Gjirokastë 1 4 - 2 4 10 Network r Network 10 s 2 1 Vlorë 7 2 3 4 16 Network Network 11 s Tab.5 Number of the existing terrestrial analogue operators according to the allotments of the digital plan and the number of digital networks necessary to support the existing analogue programs according to the digital plan allotments.

Note: National programmes include 2 RTSh programmes.

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II. DIGITALISATION

2.1 Objectives of complete digital switchover

2.1.1. Main objectives:

 Digitalization of the terrestrial analogue networks in the Republic of Albania;  Provision of additional capacities in order to increase variety and plurality of programs;  Introduction of new media technologies, (HD TV, DVB-T H) interactive services, etc;  Use of a digital dividend for other telecommunication services.

The switch off of analogue broadcasting, which shall be achieved by fulfilling objective 2.1.1.1 (Digitalization of the terrestrial analogue networks in the Republic of Albania), shall create the premises for achieving the other objectives. Therefore, it is proposed to implement the digital networks in Albania in two phases:

1. First phase: Achieving the immediate objective (Switch off analogue broadcasting); 2. Second phase: Offering additional capacities in order to increase variety and plurality of programs; introducing new media technologies and services (HD TV, DVBT-H, interactive services, etc.); and utilizing the digital dividend for other telecommunication services.

2.1.2 Immediate objectives (first phase)

The switch off of analogue broadcastings:

- Within 31 December 2012 (Law no. 9742, dated 28.5.2007 “On digital broadcastings in the Republic of Albania”. This deadline is now considered to be unrealistic. - Within 17.06.2015 (GE 06 agreement) ratified by the Albanian Assembly.

In order to achieve this objective, the three following components must be implemented, each having a different mission and characteristics:

1. Digitalization of the terrestrial analogue networks of the public broadcaster. 2. Digitalization of the national private operators’ networks. 3. Digitalization of the terrestrial analogue networks of the existing local operators.

Digitalization of the three above components requires specific strategies which should consider the mission, characteristics and above all their financial situation.

2.1.3 Coverage objective

The minimal digitalization objective shall be the coverage of population with signal, at least to the extent achieved with the analogue technologies by each operator.

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ART has the widest coverage in the Republic of Albania and covers 73% of the Albanian territory, which corresponds to over 85 % of the population.

Regarding the steps to be taken for the coverage with “digital islands”, the order shown on Table 10 shall be followed. The intention is to cover as a large number of population in the first year as possible, at least 60%, and the entire Adriatic coast. The population covered in the second year shall be 80% of the country’s population, including the coverage of the entire coast of the Ionian Sea, and a considerable part of the Northern Eastern Albania. The third year is expected to mark the coverage of at least 90% of the population.

Thus the coverage objective for the ART digital network at the conclusion of the first phase of digitalization shall be:

Covering 75 % of the territory and 85 % of the population.

Objective of the second phase:

Covering 85 % of the territory and over 90 % of the population

2.2 Digitalization of the public broadcaster’s terrestrial analogue networks

The Public Operator carries the main burden in the switchover process, as it is emphasized in a number of CoE documents.

The mission of the public broadcaster is to offer the users throughout the whole territory of the country, regardless of the geographic location, informative, didactic and entertaining programs free-to-air. This is to ensure that a large part of the population receives a certain minimum of media services. (In the meetings of the technical secretariat, the ART representatives insisted that the public operator also be entitled to broadcast encrypted programs).

In order for the public operator to preserve its irreplaceable mission in the digital era as well, it is necessary to make the transfer of its programs into digital platforms a priority.

Under the current situation, the funding for creating a digital network to support the programs of the public operator is a difficult challenge. It is estimated that setting up a national digital network costs around 12-14 million Euros. Defining a fair and realistic funding scheme and the time of return on capital are basic elements to ensure the sustainability of the public operator.

Combining the setting up of a public operator with setting up local operator’s network may cut down on the overall cost of digital switchover and may even decrease the demand of the public operator for broadcasting capacities.

2.2. Digitalization of the national private operators’ networks

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Digital broadcastings are a reality since over 4 years in Albania. Digitalb, Supersport and TRING, are now present all over the country with programs supported either in terrestrial digital networks or in satellite networks. These programs are interesting to a considerable part of the population and they have been tailored to various interests and age-groups.

Law no. 9742, dated 28.5.2007 “On digital broadcasting in the Republic of Albania”, (article 4, section 1) envisages:

“Applicants for network license whether they have a license for terrestrial analogue or satellite broadcasting who wish to set up a digital network, should take part in a competition process announced by the NCRT. The details of this process shall be defined by the NCRT in compliance with a regulation approved to this end”.

Implementation of this article in the current situation has the potential risk that it may be a different entity other than the existing operators in the market to win the race, thus jeopardizing the investments already done by the later in infrastructure, services and programs.

Under such conditions, the most suitable solution would be licensing the existing operators based on the criteria set in the law and the rules set out by the NCRT, but without applying the competition procedure. This method of licensing has been widely used in some EU countries (beauty contest). For example, the main existing analogue (public and private) channels in France (2,3,5, arte, TF1 and M6) are considered “history channels”. To promote the digital switchover of these “history channels”, the French Audio-Visual Regulatory Authority (CSA) entitled them to broadcast, in addition to the existing programme, another “bonus” programme, and has extended their licence. Currently, the time line is 15 years. After digital switchover, the license for the «history» programmes could be extended for another 15 years. These rights of the "history" operators are stipulated in the respective legislation.

The same may be applied in Albania – choose the national operators that should be stimulated to have a swift digital switchover. One of the criteria in selecting Albanian "history channels" may be the number of years the programme has been broadcasted for, its coverage over the years, the quality of the programmes, audience, use of innovative technology, etc.

Based on the capacities of the National Plan of Digital Broadcastings, the current situation and the market demand, with an outlook on the future, the number of national private networks shall initially be set to 3 (See Table 6).

The license that will be issued to the national private operators should also contain the specific criteria that the operators should meet. The following are some of the main criteria:

1. The existing operators shall free the licences that have been arbitrarily occupied and migrate to the frequencies defined in the National Plan (GE 06), according to the NCRT specifications within the time defined in the license. The time limit shall be harmonized with the “digital islands”; 2. Each existing operator shall be licensed for a national digital network. This means that in order to increase the effectiveness of spectrum use, in order to be able to broadcast the majority of the programs which are at the moment being supported on several networks,

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MPEGs-4 compression system should be used, instead of the MPEG-2 system applied today. The license shall also provide time limits for this transition; 3. The license shall provide for obligations to support the local operators’ networks (program support or facility sharing); 4. The license shall envisage criteria for ensuring equal access, non-discrimination and transparency; 5. The license shall set criteria for the standardization of limited access systems, protection of juveniles from harmful programs, etc.; 6. The license shall also set the criteria for applying the new and interactive services (DVB- H, HD, etc.)

License application based on beauty contest principle requires the amendment of the law. This issue should be resolved during the drafting of the new law “On audio and visual broadcasting in the Republic of Albania”, introducing a special article under the chapter of transitory provisions.

Regardless of the method of licensing, the entity entitled to set up and use a national, private, terrestrial, digital network shall submit all the necessary financial guarantees to ensure the set up of a quality network with the characteristics defined in the law and in the technical conditions specified by the NCRT. In this context, no financial problems are anticipated in the set up of national, private, terrestrial, digital networks.

2.3. Digitalization of local private operators’ networks.

It is obvious that the existing local operators, with a few exceptions do not have the necessary financial means and technical capabilities to set up and maintain terrestrial digital broadcasting networks. They do not tend to willingly switch off analogue broadcasting within 2015, since they want maximal return on their investment for setting up the network.

On the other hand, digital switchover should be carried out without spoiling the existing structure of the media market which is currently working as a free-to-air market funded by commercials. Maintaining the market structure means that the existing analogue programs that supported on digital platforms will continue to be broadcasted free-to-air and will be funded by the commercial market.

Local private operators, being close to the local communities, represent values of plurality of opinions, programs, minorities, etc, which should be preserved and promoted. Creating opportunities for supporting their programs in digital platforms without much economic strain, serves maintaining the existing market structure, where users are used to have some free-to-air programs.

In search of ways to carry out the full digital switchover in the most efficient possible way in the financial and social aspect, the NCRT has explored several options. Combining the set up of the public operator’s network with the set up of the local operators’ networks, may cut down on the overall cost of digital switchover. This will ensure the support of all existing local operators on the public broadcaster’s digital network, leaving for the latter a minimal number of program to achieve its mission. In this case, the process of transferring the existing analogue programs is considered detached from the licensing process of

Page 19 of 83 the new local terrestrial digital broadcastings, which can be carried out in a second stage after achieving the main objective which is the switch off of analogue broadcastings.

2.3. Use of the digital plan capacity

After the consulting process all participants agreed with the proposal to use the national coverage Plan shown in the following table:

The number Number of used of Type of No. Classification Coverage area coverage of potential network the national networks plan National Public Territory of 1 2 2 11 SFN Operator Albania Private National Territory of 2 3 3 11 SFN Operators Albania Tiranë-Durrës - Regional Operator 1 0.3 1 SFN Fier 3 Regional Operator 2 2 regions 0.7 4 2 SFN 4 Local operators 1 region 1 11 SFN Territory of 5 Reserve 1 1 11 SFN Albania Total number of 8 22 national coverage Tirana and 6 Tirana operators 1 7 SFN surroundings

Tab.6 Use of national coverage of the Albanian digital frequency plan

As it may be seen from the above table, the destination of one of the national coverage (11 allotments) shall be determined in the future, depending on the needs and the use of new technologies.

Following discussions at the Technical Secretariat, the above table was amended, leaving thus two instead of one national coverage to be set in the future. The use of one coverage by the regional operators shall be reviewed later. Thus, the above table changes as follows:

The number Number of used of Type of No. Classification Coverage area coverage of potential network the national networks plan National Public Territory of 1 2 2 11 SFN Operator Albania Private National Territory of 2 3 3 11 SFN Operators Albania Page 20 of 83

3 Local operators 1 region 1 11 SFN Territory of 5 Reserve 2 2 11 SFN Albania Total number of 8 22 SFN+MFN national coverages Tirana and 6 Tirana operators 1 7 SFN surroundings Tab.7 Use of national coverage of the Albanian digital frequency plan, as amended

2.4 Technical characteristics

2.4.1 Types of networks

As presented in point 1.1, the national frequency plan envisions a division of the territory of Albania into 11 allotments. For an optimal use of the capacities provided by the national frequency plan, it is proposed that each planned allotment be covered by a single frequency network (SFN). To create larger coverage than one allotment two or more SFNs should be combined. To create a national network all the SFNs of the 11 allotments should be combined, i.e. an MFN (Multi Frequency Network) will be created – the type of the network shall be 11 SFN. The possibility of building a SFN is considered one of the defining features of digital broadcasting. It allows for a sharp increase in spectrum efficiency. One of the main issue regarding SFNs is the requirement for synchronization among transmitters even if they are located far away from one another. On the other hand, SFNs presents the advantage that expanding the network and adding new transmitters (such as gap-fillers) can be done without re- planning. The basic principle of the Geneva Plan is that the registered items are protected and any new activation must be compatible with the items recorded in the plan. When a new co-ordination request concludes positively, the item co-ordinated becomes part of the Plan with the same rights. In case of a new co-ordination request, if an agreement is not reached among the concerned administrations, the disagreement is reported to ITU which has the duty to assist in solving the controversy among the ITU State Members. This means that GE06 Agreement allows some flexibility and that evolution of GE06 Plan can easily accommodate new frequencies per allotment, or even new transmitters provided that some provisions are respected. The exact procedure for modifications to the GE-06 plans is given in Article 4 of Geneva 06’ Agreement.

2.4.2 Broadcasting system

The broadcasting system will be the DVB-T described as “System B” in the ITU-R BT.1306- 3.DVB-T Recommendation (Point 1.1 of Chapter 1 of Annex 2 (The technical elements and criteria used in developing the Plan and implementing the Agreement) on the Final Acts of the Regional Radio communications Conference on the planning of terrestrial digital broadcasting service in parts of Regions 1 and 3, in the frequency bands 174-230 MHz and 470-863 MHz).

To allow a better use of the spectrum resources, the DVB consortium issued, in 2009, specific conditions for the DVB-T2 technologies as an extension of the existing DVB-T standard. Such

Page 21 of 83 an extension results in an increase of 30-50% of the DVB-T2 effectiveness compared to DVB-T. it is expected that the two standards coexist for some years. Testing of the DVB-T2 specifics has already begun in UK and Italy. In June 2008, the Public British Broadcaster (BBC), together with the operators of the Arqiva and National Grid Wireless broadcasting network, carried out the first test broadcasting of DVB-T2 with three HD channels broadcast in one multiplex. One operator in Italy (Europe 74) has initiated lately commercial operations in one Mux in August 2010 based on DVB-T2/MPEG-4 technology. Europe 7 has offered a pay per view option based on DVB-T2, providing eight HD contents to the final viewer, through a monthly subscription of between 7 and 20 Euros per month. The decoder based on DVB-T2/MPEG-4 technology is disseminated directly by Europe 7 at a price of about 120/130 Euro. In Finland, the DNA Oy operator has received a license to operate in two DVB T2 multiplexes. The presentation was made recently after a trial period in Lahti, in December 2009. Some other countries such as Sweden and Austria5, have already made the announcements or have already installed the DVB-T2 networks.

Based on what was said above, Albania is not excluded from the possibility of implementing the more advanced DVB-T2 system.

All the networks mentioned in the above table will be used for fixed reception6, even though the technical parameters approved in the Digital Plan allow their use even for portable outdoor and mobile reception.

The manner of the reception of the network(s) that will be benefited by the use of the extra coverage, shall be determined at a later stage.

2.4.3 Compression standards

For the digital terrestrial networks established in Albania the compression system MPEG-4 H.264 and other more advanced future systems shall be used. This will allow for an efficient use of the spectre, and HD programmes. Since the existing operators of the digital terrestrial networks (not licensed) apply the MPEG 2 standard, a transition period shall be determined MPEG2/MPEG-4, (not more than 2 years)

2.4.4 Common interface

The development of digital television (on satellite, terrestrial and cable frequencies) and, most of all, the introduction of Pay-TV and conditional access platforms, has generated a wide number of encryption tools, aimed at enabling only the viewer identified with a specific decrypting code to watch the desired programme.

4 http://www.europa7.it 5 http://www.dvb.org/about_dvb/dvb_worldwide 6 The technical standards set forth in the Final Acts of RRC-06 foresee 3 manners of reception: a) fixed reception, b) portable outdoor and mobile reception, and c) portable outdoor reception, on which different broadcasting powers are foreseen. Page 22 of 83

The problem with encryption is that each service provider offering content through Pay-tv channels may use an encryption code that differs from the others. Consequently, the consumer who wishes to view channels available on more than one platforms, encrypted differently, will have to buy a decoder for each encryption system. The solution to such problem is the adoption of the so-called “Common Interface”, a defined standard that enables the addition of a conditional access module (CAM) in a DTV Receiver, to adapt it to different kinds of cryptography. It is also known as DVB-CI for Digital Video Broadcast Common Interface. The interface allows broadcasters to use modules containing solutions from different suppliers in the same broadcast system, thus increasing their choice on anti-piracy options. The system is formed between a host and a module:

 host: a device where module(s) can be connected; for example, an Integrated receiver/decoder (IRD), a VCR, a PC ...  module: a small device, not working by itself, designed to run specialised tasks in association with a host; for example, a conditional access sub system, an electronic program guide application module, or to provide resources required by an application but not provided directly by the host.

Examples of a host are a digital television or digital set-top box. The normative DVB-CI standard EN 50221 was defined in 1997 by CENELEC, the European Committee for Electro technical Standardization, and allows many types of modules; however, only the Conditional Access Module (CAM) has found popularity because of the Pay TV market. Typically, the host sends an TS7 (Transport Stream) an encrypted MPEG to the CAM and the CAM sends the decrypted transport stream back to the host. The CAM often contains a smart-card reader. The creation of such standard and its implementation, eventually resulting into the obligation to include a DVB-CI in all digital television terminals8, has taken several years to the EU Member States. Therefore, this document proposes the application of a single standard, so that the producers of decoders and TV-sets may include the Common Interface devices in the hardware and avoid generating conflicts that would be harmful to the consumers. The Italian market experience also suggests mandating digital tuners in television sets. In fact, according to relevant statistical data, this has stimulated and accelerated the digitalization process and since its introduction the number of receivers integrated in the TV-sets has doubled.

2.4.5 Numbering plan

7 Signal containing the programme and all the relevant information. 8 The increased proliferation of television sets with an integrated digital tuner (iDTVs) can ease the task of digital conversion. Already many of the major consumer electronics manufacturers only sell television sets with an integrated digital tuner which thus reduces the number of television sets that need to be converted. In Europe, only France and Italy have mandated digital tuners in television sets. Since March 2008, retailers in France have been obliged to sell television sets with a digital tuner while in Italy this requirement has come into effect in June 2009. In addition, all HD-ready television sets sold in France must include a digital tuner and an HD decoder as of December 2008. While it has not mandated digital tuners, the United Kingdom has benefited from the decision by several major retailers to stop selling analogue television sets. The United States has made mandating digital tuners a cornerstone of its digital transition policy. Since March 2007, American manufacturers have been obliged to include a digital tuner in all television sets. Page 23 of 83

The digital TV standard DVB offers an important tool to Network/Mux operators through its signalling channel called Service Information (DVB-SI). Such a signalling channel allows, in addition to other opportunities, the possibility to communicate to receiving equipment and remote controls the number assigned to each DTT radiated channel. The DTT receivers can automatically order the DTT channels by exploiting a particular identifier/field defined in the Mux TS9 (transport stream), called Logical Channel Number (LCN). From the operating point of view, the order of DTT channels is managed by the Network/Mux operators which can insert in the transport stream the correct LCN identifier corresponding to the number assigned for each digital service. As a result, all DTT receivers (through appropriate software) allow the viewer -when installing the DTT receiver for the first time- to automatically order all DTT received channels according to a pre-defined list (the so-called “DTT numbering plan”). The order of the list, as well as its format, is extremely important: all the channels should carry their specific number, in 3 digits (or 4 digits, but the 3 digits system has been adopted by almost all EU Countries), and all the transmitters in the Country should be programmed to send the same numbering list. Usually the 1XX group of channels is dedicated to the so-called “generalist”, or multipurpose channels (typically the PBS and those who are not characterized by a specific theme); the 2XX group usually includes the “news channels” (CNN, BBC world and so on), the 3XX group the “movie” channels, the 4XX group the “sport” channels, the 5XX group the “local” channels and so on. The DTT ordering should not be defined in receiver specifications but through the on-air signal that carries the numbering information through the LCN identifier. The DTT receivers should be able to recognize the number assigned to each DTT channel when performing channel tuning. If the numbering plan is not defined by the regulator conflicts emerge at receiver level among DTT channels. Such conflicts increase uncertainty and have, in some countries, created confusion and slowed down the implementation of the digitalization process. The numbering plan should be defined on the basis of transparency and non-discrimination but also taking into account existing consumer habits.

The Albanian numbering plan shall have 3 digits and be drafted by NCRT before organising the process of licensing the digital operators.

2.5 Methods of full switchover to digital broadcasting:

Immediate objective achievement

The use of the TVSH digital network for supporting existing analogue operators and implementation according to the method of digital.

2.5.1 Digital islands method

The set up will be done respecting the order and the timeline set for one allotment after the other (the digital islands method) until full coverage of the Albanian territory (11 allotments). The order of implementation of the digital islands will be approved by the Ad Hoc committee on digital switchover strategy.

9 Signal containing the programme and all the relevant information..

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Once the set up of the network in a given allotment is over, after a short trial period (1 month), the analogue broadcastings of the public operator and the local private operators covering the area of the respective allotment, will be switched off.

The deadlines determined for establishing the RTSH digital networks shall be the same with those for establishing the digital networks of the private national operators, as determined in the license terms granted by the NCRT.

In order to switch off the analogue broadcastings in Tirana-Durrës area, and in the region of Vlora, where the number of the existing local analogue operators exceeds the digital network capacity, there will be obligations imposed (even temporary ones) on national private operators defining a minimal number of free-to-air programs for the public to this end. These programs will be supported on private networks with the same conditions (including the economic ones) as well as programs that will be supported on the public operator network.

2.5.2 Using the RTSH network to support the existing analogue operators

The first national digital network of the TVSH (MUX 1) will support during the first phase all the existing local programmes supported in analogue networks.

This network shall be established one allotment after the other, according to the method described in point 5.1.

There will be at least 3 national programs of the public operator supported on this network against payment, all the existing local private programs licensed by the NCRT included in the given allotment.

Existing programmes are all those programmes licensed until end of 2011.

All programs supported on this network will be broadcasted free-to-air for the public.

The set up of MUX 2 may be partially implemented for Tirana – Durrës region since the first stage (see point a), in order to complete the capacities of MUX 1 for supporting the existing analogue operators.

The following table shows the use of the capacity of the first digital network of the public television – which is to support the existing local analogue programmes, and the capacities to support the national programmes of the RTSH and the two existing national analogue operators.

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Necessa ry Licensing area digital No. Allotment Total network s Up to 1 Up to 4 MPEG Repeat National Regions Regions 4 1 Shkodër 7 1 2 4 14 1 Network 1 Kukës - 1 - 4 5 2 Network 1 Dibër 2 - - 4 6 3 Network 1 Lezhë 3 5 - 4 12 4 Network 2 Tiranë 11 16 3 4 34 Network 5 s 1 Elbasan 2 7 2 4 15 6 Network 1 Fier 5 5 1 4 15 7 Network 1 Berat 4 1 1 4 10 8 Network 1 Korçë 5 1 - 4 10 9 Network Gjirokastë 1 4 - 2 4 10 10 r Network 1 Vlorë 7 2 3 4 16 11 Network

Tab. 7 Support of the existing analogue operators in the TVSH network

The enhancement of the broadcasting capacities of the public operator (MUX 2 setup) will take place at the same time with the establishment of the initial network. This requires the identification of the optimal number of programmes which will be considered as valid to fulfil the mission of the public operator. The needs for new services of the public operator (HD, interactive services, etc) will be identified in this phase.

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2.5.3 Establishment order of Digital islands

The National Television's digital network establishment, depending on the available financial resources, may be planned to be fulfilled within one or several years. The use of the digital islands' method provides for the planning of the establishment in phases combined with the termination of analogue broadcasting. The advantage of this method is the rationalisation of investments and the gradual termination of analogue broadcasting. In the first implementation phase, the digital signal coverage of the territory will be aimed to be larger or equal to the analogue signal coverage of each existing analogue operator.

In the first phase, the digital signal coverage will be aimed to reach over 90 % of the population.

2.5.4 Digital islands' establishment chart

The establishment of digital islands will start in Tirana region, according to the order described in the chart below and will be completed in 3 years from the starting day.

Cove Implementation of digital islands rage No Populati (% of Analogu Area Family Transfer . on (%) the Start Finish Test e switch Month popul off ation) Tirana Region 1 Durrës 32.71 347369 85 Region 0 2 3 4 6 2 Fier Region 11.48 97594 85 3 5 6 7 9 Elbasan 3 9.99 106090 85 Region 6 8 9 10 12 4 Lezha Region 5 52809 85 9 11 12 13 15 Shkodra 5 7.82 83054 85 Region 12 14 15 16 18 6 Vlora Region 8.74 92819 85 15 17 18 19 21 7 Korça Region 8.29 88113 85 18 20 21 22 24 8 Berat Region 5.47 6281 85 21 23 24 25 27 9 Dibra Region 4.22 44823 85 24 26 27 28 30 Gjirokastra 10 3.7 39347 85 Region 27 29 30 31 33 11 Kukës Region 2.58 27346 85 30 32 33 34 36 Teritory of 100 985643 85 Albania Implementati on through 0 2.67 2.75 2.83 3.00 the years Tab.9 Page 27 of 83

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Implementimi i ishujve digjitalë Technical Announcem Announcem Analog No Applicati Area specificati ent of ent of Transfer ue . on review Start Finish Test ons competition winner Month switch off Tiranë – Durrës 1 Regions Establishment of June Septemb October Novemb Decemb SFN 2012 er 2012 2012 er 2012 er 2012 Connection of op ekz studios with the Head June Septemb October Novemb End 2012 er 2012 2012 er 2012 2 Region of Fier Establishment of June Septemb October Novemb Decemb SFN 2012 er 2012 2012 er 2012 er 2012 Connection of op ekz studios with the Head June Septemb October Novemb End 2012 er 2012 2012 er 2012 3 Elbasan Region Establishment of July Novemb December January Februar SFN 2014 er 2014 2014 2015 y 2015 Connection of op ekz

studios with the Head July Novemb December January

End 2014 er 2014 2014 2015

4 2011

Lezha Region

2012

Establishment of January April June July

2012

2012

SFN 2013 2013 May 2013 2013 2013 Connection of op ekz January April June

studios with the Head 2013 2013 May 2013 2013

December December January March April

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End 5 Shkodra Region Establishment of January April June July SFN 2013 2013 May 2013 2013 2013 Connection of op ekz studios with the Head January April June End 2013 2013 May 2013 2013 6 Vlora Region Establishment of Novemb March May June SFN er 2013 2014 Prill 2014 2014 2014 Connection of op ekz studios with the Head Novemb March May End er 2013 2014 Prill 2014 2014 Implementimi i ishujve digjitalë Technical Announcem Announcem No Applicati Area specificati ent of ent of . on review Start ons competition winner 7 Korça Region Establishment of January April June Korrik SFN 2013 2013 May 2013 2013 2013 Connection of op ekz studios with the Head January April June End 2013 2013 May 2013 2013 8 Berat Region

Establishment of Novemb Februar March April May

SFN er 2013 y 2014 2014 2014 2014

2011

Connection of op ekz

2012

studios with the Head Novemb Februar March April

2012

2012

End er 2013 y 2014 2014 2014

9 Dibra Region

January March April Establishment of December July October November Decemb Janar

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SFN 2014 2014 2014 er 2014 2015 Connection of op ekz studios with the Head July October November Decemb End 2014 2014 2014 er 2014 10 Gjirokastra Region Establishment of July October November Decemb Janar SFN 2013 2013 2013 er 2013 2014 Connection of op ekz studios with the Head July October November Decemb End 2013 2013 2013 er 2013 11 Kukës Region Establishment of June Septemb October20 Novemb Decemb SFN 2013 er 2013 13 er 2013 er 2013 Connection of op ekz studios with the Head June Septemb October20 Novemb End 2013 er 2013 13 er 2013

Tab.10 Digital island establishment chart

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2.6 Licensing of digital networks and programs

2.6.1 Proposal for models of licensing of digital networks and services in Albania

Albania has created a strong tradition of receiving free to air programmes through terrestrial analogue broadcasting, which influences the selection of the licensing model and of the digital broadcasting. The model known as “gatekeeper” where the right to decide on digital platform supported content is given to a private entity is not considered as appropriate for Albania. In analogy to many European states, it is proposed for Albania as well to have a licensing system where the regulator should have control over the content provided, aiming to fulfil the public mission of the electronic media. The following types of licenses will be applied in order to fulfil this objective:

a) Service license for audio programmes – to provide an audio programme service. b) Service license for audiovisual programmes – to provide an audiovisual programme service. c) Audio broadcasting license, which consists of: i. Service license for audio programmes, according to letter 'a', and ii. Licence to establish and operate a digital radio network d) Audiovisual broadcasting license, which consists of: i. Service license for audiovisual programmes, according to letter 'b', and ii. Licence to establish and operate a digital television network

Such a division of licenses creates flexibility, adapting to every business model in the audiovisual media market. For digital broadcasting – it is proposed to give a digital, audio or audiovisual, broadcasting license. This license shall include a license for programme services and a license for establishing and operating the digital network (1 network – many programmes). To avoid monopolies and to stimulate pluralism, the operators to be equipped with a digital broadcasting license (audio or audiovisual) will be allowed to use only 60% of their digital network capacity to support their programmes. They should then offer the free capacities, based on fair, equal and non-discriminating criteria, to other operators which do not have their own network, but which have a programme service license (audio or audiovisual), according to points 'a' and 'b' above.

The licenses shall be categorized into: a) national – when not less than 80% of the territory is covered with signal; b) regional – for coverage of up to four regions which are located in the same geographic stretch; and c) local, for coverage of one region.

The abovementioned programme service licenses shall be classified into national, regional or local depending on the category of the terrestrial network (analogue or digital) that will support these services.

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For programme services to be supported by other networks than terrestrial networks (analogue or digital), i.e. programme services that do not require use of finite natural resources – it is proposed to issue, without competition, authorisations for the audio programme service and authorisations for the audiovisual programme service. These authorisations shall be classified into:

a. Satellite – for satellite system supported services. b. Cable – for cable system supported services. c. Online service – for internet services. d. Technical service for limited access service. e. Service provider, including the limited access service.

The above proposals have been reflected in the new draft law on the Albanian audiovisual media.

2.6.2 Licensing of the public operator's networks and programs

According to a widely known world practice, the public broadcaster does not need a license for establishing its digital network/networks and programs supported by such networks. Based on the digital frequency plan, the NCRT grants the RTSH frequencies for establishing 2 national digital networks. TVSH shall also be entitled to support one local program through its digital network, or through its private local digital networks in the areas of Shkodra, Korça, Gjirokastra, and Kukës.

The programs valued as programs which fulfil the public mission of RTSH, are broadcasted free to air. Following a public consultation and with the proposal of the public operator, these programs are adopted by the Parliament. In addition to the above programs, the RTSH may also offer limited access programs in order to compete in the media market, in accordance with the availability of the free space in the platform (network) and financial resources, following the completion of the first phase of the digitalisation process (after the termination of analogue broadcasting). The conditional access programs shall not benefit from the RTSH public financing scheme. They shall be financed only by advertisements and conditional access service subscribers.

Following a public consultation, RTSH prepares a public broadcast service contract which should include the principles it uses and the activities it undertakes in order to fulfil its purpose as public broadcaster, which is to be submitted at the NCRT.

The public broadcast service contract must include, inter alia:

a) programs to be aired in its digital network/networks, clearly separating the free to air programs which will be broadcasted for the fulfilment of its public mission and the limited access programs (if any). b) nature and duration of programs for children, c) nature and duration of programs on science and technology, d) number of publication it should prepare, publish, and distribute in accordance with its purpose as public broadcaster, and e) the drafting, publication, and distribution of recorded audio and video materials in accordance with its purpose as public broadcaster.

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The NCRT may sign the public broadcast service contract or require its review by the RTSH. In any case, it should forward the contract at the Parliamentary Committee on Means of Information.

2.6.3 Licensing of the digital networks and programs of national private operators supported by them

The licensing of national private digital operators will be carried out with a priority for the content providers (media service providers). The licensing of the private national digital operators shall be done with a priority for the existing national analogue programs, in accordance with the provisions of the law and the rules regulated by NCRT, according to the beauty contest principle.

The NCRT determines the procedures, ways, and forms of the assigning of national programs that will be supported in the 3 national private digital networks.

The existing national analogue programs will continue to be broadcasted freely even after being supported in the digital platforms.

Holders of (national, regional and local) licenses for digital audio broadcasting and national licenses for digital audiovisual broadcasting must give access to not less than 40% of their multiplex capacity to the MSPs having an audio programme service license and/or audiovisual programme service license, based on fair, reasonable and non-discriminating criteria.

The licensing of new networks after the fulfilment of the needs of the existing operators will be carried out on the grounds of competition of candidatures, in accordance with the procedures regulated in the law and the respective rules of procedure of NCRT.

2.6.4 Licensing of digital networks and programmes of the regional and local operators supported by them.

In the first phase of digitalisation, the existing operators of private analogue television programmes (national and local) will be provided support, against a fee, by the first network (MUX1) of the public operator.

It is not to be excluded the opportunity to offer as a priority to the existing local operators which are part of an allotment to participate in establishing a local digital network by creating a joint company, if there are any financing means. Holders of licenses (national, regional and local) for digital audio broadcasting and national licenses for digital audiovisual broadcasting must give access to not less than 40% of their multiplex capacity to the MSPs having an audio programme service license and/or audiovisual programme service license, based on fair, reasonable and non-discriminating criteria.

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If the local operators of one allotment fail to achieve a collaboration agreement within the deadline set by NCRT, the latter will organize a competition on the licensing of the digital network and of the programmes supported by the respective allotment.

The licensing of the regional digital networks and their programmes will be carried out through competitions organised by NCRT.

2.7 Programmes supported by digital networks

2.7.2 Free to air programmes

Free to air broadcasting is that kind of broadcasting which does not require payment of a fee to the service provider.

All the programmes provided by the existing analogue operators, including the public broadcaster, will continue to be broadcast free to air even in the digital platforms.

The public broadcaster (national and regional) will be assigned a minimum number of programmes to be broadcast free to air, to fulfil the public mission.

Licensing of additional programmes, after the first digitalisation phase is completed, will be carried out based on the NCRT criteria, which will also determine the appropriate ratio between free to air and limited access programmes.

2.7.3 Limited access programmes

The meaning of limited access is measures and/or technical regulations taken in order for access to protected services be done against a preliminary individual authorisation.

Limited access programmes during the immediate objective implementation phase will be licensed only for private networks, in the quantity and based on the criteria set forth by NCRT.

Provision of limited access services and of their accompanying/supporting services, will be carried out in compliance with the law and NCRT rules. NCRT ensures, through the rules issued pursuant to this law, that protected services be provided based on fair, reasonable and non- discriminating criteria.

NCRT has the right to impose obligations to limited access service providers.

Limited access service providers must ensure access to their interfaces/API or to the EPG (electronic programme guidance) in a fair, non-discriminating and appropriate manner.

NCRT shall determine the conditions for the functioning of the users' digital television devices.

2.7.4 Individual programme

Programmes to be supported by the terrestrial digital networks (only the programme to be supported by other networks) will be licensed by NCRT through a competition, according to the

35 criteria determined upon starting of the competition. The programmes will be classified into National, Regional and Local depending on their coverage. Depending on their broadcasting manner, the programmes will be classified into free to air and limited access programmes (see above).

Television programmes are classified into: a) national – when not less than 80% of the territory is covered with signal; b) regional – for coverage of up to four regions which are located in the same geographic stretch; and c) local, for coverage of one region.

A licensed entity shall be entitled to provide a number of programmes not more than 1/3 of the national, regional and local programmes respectively.

2.8 Introduction of new media technologies and services

2.8.2 Introduction of HD broadcasting in terrestrial digital networks

In the first phase (closure of analogue broadcasting), in order to ensure the support of all existing analogue programs in the network of RTSH, the broadcasting standard to be used will be SD (Standard Definition), which implies that the broadcasting quality will be satisfactory compared to analogue broadcasting but not higher. The licensing of HD (High Definition) programs will start in the second phase, during the licensing of national, regional, and local private digital service program networks, since the broadcasting capacities in this phase will be such to cope with the requirement for high broadcasting speed of HD channels. There is an opinion in developed countries according to which all programs will be in HD in the future. For this purpose, the following efforts are being made:

a. Planning of additional coverage in the Digital Frequencies Plan (France); and b. Improvement of the networks establishment technology (DVB-T2) (United Kingdom)

2.8.3 Introduction of mobile TV broadcasting (DVB-T H)

Efforts for the introduction of mobile TV broadcasting have been and are being made in many countries. Up to date, the efforts have proved to be unsuccessful due to the specific character of the business. An evidence of this is the failure of such a business in our country.

In other countries of the world, the idea that this business may be developed successfully by mobile telephony operators, in the frequency bands set for broadband, is progressing more and more.

However, the licensing of DVB-T H operators is not foreseen for the first and second phase of digitalisation.

2.8.4 Introduction of other services (interactive services, etc)

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On demand audiovisual services are non-linear services offered by the Media Service Provider (MSP) at the moment selected by the user, following the request of the latter after choosing from a program guide offered for this purpose by the MSP. These services may be also supported in terrestrial digital networks, in the case the capacities of these networks would allow such a thing, thus after the first phase of digitalisation. The non-linear broadcasting is the offering of the audio and/or video service following an individual request and in the moment chosen by the user.

2.9 Structures monitoring the digitalisation process

2.9.2 Inter-institutional Task Force

Pursuant to order of the Prime Minister No 77, dated 02 June 2009, “On the establishment of the Ad Hoc committee on the switchover strategy,” the inter-institutional structure chaired by the Minister of Innovation, Information Technology and Communication was established. This structure will coordinate, at a state level, all procedures and phases of the digitalisation process until the complete switchover to the digital system.

Pursuant to Order of the Prime Minister No. 159, dated 27 July 2010, “On some additions and amendments to Order No. 77, dated 02 June 2009 'On the establishment of the ad hoc committee on the switchover strategy'”, the Technical Secretariat for the purpose of supporting the work of the ad hoc committee was established. This secretariat is made of two NCRT experts, two RTSH experts, and one expert from each of the institutions composing the ad hoc committee. The two above mentioned structures will operate until the switch off of the analogue TV broadcasting.

2.9.1.1 Task Force costs (Annual)

Tab. 11 Task Force costs

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2.9.3 Public information structure

In analogy with the experience of other countries, the switchover process will be assisted by special public information structures.

The mission of the structure will be:

 To inform, explain, and accompany viewers during the complete switchover to digital broadcasting;  To manage aid (subsidies), if the law will stipulate any;  To monitor the national project for the establishment of digital networks according to the regions.

The activity of the structure will include:

 National communication campaigns  Regional information means  Mobilisation of different professionals, officials, and associations in the information activities on the use of digital technology, etc  Management of financial aid, technical assistance etc.

This structure must be established through law which should also regulate its funding. According to the experience of other countries (France) such a structure (called “France Telenumerique”) may be co-financed by the state and the private audiovisual media sector. The funding scheme of “France Telenumerique” is:

 State 50 %  “Historic” national channels: o France Televisions 15 % o TF1 10 % o Canal+ 10 % o M6 10 % o Arte 5 %

2.10 Digitalisation funding

2.10.1 TVSH network/networks establishment funding

2.10.1.1 - The establishment cost of the Public Broadcaster’s national digital network (RTSH) - (MUX 1)

Table 12 shows a budgetary assessment of the costs for the Public Broadcaster’s national network establishment (RTSH). The assessment is based on the investments needed to establish a basic network SFN, type RN2 (Reference Network 2) which provides for the installation of 3 main broadcasters for each allotment. Considering the Albanian rough terrain, it is foreseen to have a minimum number of gap fillers (3 for each allotment). The needs for the security of broadcastings have not been considered (1 extra broadcasting station for each broadcasting outlet). These data provide for special allotments to have signal covering of up to 60 – 70 % of

38 the territory, or 70 – 90 % of the population that leaves in this territory. The rest of the coverage process shall be achieved in later phases.

After establishing the budget for the network of one allotment, the budget for the national digital network is calculated by multiplying the budget of one allotment with 11 (the number of allotments). MUX 1 shall be a combined national/local network. Therefore, its cost shall be higher than the cost of establishing a simple national digital network – because the investment also includes the costs of local Head ends. The connection of local head ends with the central one shall be achieved through microwave systems and it is included in the ‘fix systems for connecting MUX-s with broadcasters’ item, because the same broadcasting outlets will be used. It is not excluded their connection to cable systems with optic fibres (especially for the back bone-main network).

Prices have been set based on market prices. The accurate price shall be determined during the procurement process based on the technical specifications described by the technical project. The following assessment has orienting purposes only.

Digital network (RN2)

Price Value Quantity Equipments (€) (€) 1. Central equipment 1.1 Fix systems (Link) to connect studios with MUX (8) 15000 8 120000 1.2 Encoder 16000 1 16000 1.3 Statistical 20000 1 20000 1.4 NMS (Network management system) 20000 1 20000 Totali1 176000 2. Fix systems to connect MUX with broadcasters 2.1 Link 51 Mbps 40000 3 120000 2.2 Gap filler (min 3) 10000 3 30000 Total 2 150000 3. Broadcasting system 3.1 Broadcasters (3) 50000 3 150000 3.2 Antena system (3) 5000 3 15000 3.3 Gap filler 20000 3 60000 Total 3 225000 4. Others (Towers, Mot gen, facilities) 40000 3 120000 TOTAL (1+2+3+4) 671000

WORKS 400000 TOTAL INVESTMENT per allotment 1071000 TOTAL INVESTMENT/PROGRAM per allotment 66937.5

Tab. 12 The budget for the establishment of the digital network for 1 allotment

Budget for the establishment of the national network

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Approximately, the investment for the establishment of the national digital network is defined as the product of the investment for 1 allotment with the number of allotments (11) The result is shown in the table below (Tab.13)

Denomination Lekë Euro

TOTAL INVESTMENT for one national network 1 531 530 000 11 781 000

TOTAL INVESTMENT /national PROGRAM 95 720 625 736 312.5

Adding the costs of the head ends in the allotment centres, the budge for the establishment of MUX1 is:

Denomination Lekë Euro

TOTAL INVESTMENT 1 837 836 000 14 137 200

Tab 14 The budget for the establishment of the national digital network (11 allotments)

Budget for the establishment of two national networks

The establishment of the second RTSH network will cost less than the first network because there is no need to build head ends in the allotment centre. Approximately the second network will cost: 1 225 224 000 Lekë or 9 424 800 Euro

In total, the establishment of the two networks will cost:

Denomination Lekë Euro

TOTAL INVESTMENT for the two national networks 3 369 366 000 25 919 000

2.11.1.2 Funding the digitalisation of the public TV network (MUX 1 + MUX2)

The establishment of MUX 1 will be the basis for the digitalisation of TV broadcasting in Albania. MUX 2 shall be exclusively used by the RTSH. The funding of the establishment of this network represents a serious challenge. The establishment of the network allotment after allotment cushions the requirements for funding while it prolongs the time of the complete switchover in digital broadcasting. The presented variant of the implementation deadlines envisages the distribution of investments in three years, in this way facilitating its funding.

For the purpose of collecting the required funding, lacking of other alternatives, in an environment where the tax on the TV set has increased from 600 Lekë to 1200 Lekë, the variant to impose the “digitalisation tax,” as proposed in the previous versions of this strategy, is 40 invalidated. However, it may be foreseen that in the time period of some years, a percentage of the incomes from this tax may be used for the funding of the establishment of digital network. Following the establishment of the national digital network of the public TV, the funds for the maintenance and operation of the network will be covered by the payments to be made by local private operators that will be supported in the network. This will result in the provision of financial stability of the public digital network operation.

The alternatives of financing the establishment of the RTSH digital networks are as follows: a. Financing from the state budget, as stipulated in Law 8410, dated 30.09.1998 "On public and private radio and television in the Republic of Albania (article 117), which states:

The state budget finances: - radio services for Albanians outside the borders of the Republic of Albania; - radio services for the foreign public (in foreign languages); - television services for Albanians outside the borders of the Republic of Albania; - important technical projects for the introduction of new technologies in production and broadcasting; - important motion picture projects or major pan-national artistic activities; - the symphonic orchestra of RTSH and cinematography.

The amount of financing is determined in the annual law on the state budget. b. Financing through a soft, long-term, loan guaranteed by the Albanian Government, which will be paid mainly through the income derived by the device fee and through the income from the payment of existing analogue operators supported by MUX 1. In this case, the loan will be repaid by RTSH.

The following table shows the necessary funds through the years:

Tab16

Finally, after some adjustments related to the nature of investments, the requests for financing over the years are as follows:

Leke 780 000 000 2012 Euro 6 000 000 Leke 1 170 000 000 2013 Euro 9 000 000 Leke 1 170 000 000 2014 Euro 9 000 000 Leke 2 49 470 000 2015 Euro 1 919 000 Leke 3 369 470 000 Totali Euro 25 919 000 Tab17

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Note: the cost of the capital is not taken into account in the above calculations.

If for the payment of the investment (both TVSH networks) part of the device fee will be used (let's say 4 Euro out of 8.57 Euro total), approximating the number of families in about 900 000, the self-payment of the investment will be achieved in 10 years (calculating approximately even the cost of capital-soft loan). The above deadline will be realistic if the expenses for the digital network maintenance are afforded through the income derived through the support of the existing analogue operators by the public operator digital network.

2.11.2 Decoders' subsidy

To achieve the above plan of switching completely to digital broadcasting while establishing the networks, the audience should be provided with digital receivers or decoders which enable the use of existing analogue receivers and receive digital signals. Decoders should have MPEG 4 compression. Meanwhile, MPEG 2 decoders are already in use to receive digital signals of existing private operators. In planning needs for decoders it should be considered that each family be provided with one (100% coverage). Table 18 shows the need for decoders:

Population No. Region Allotment Population Families Needs for % Decoders (items) 1 Tirana – Durrës AL005D 1389474 32.71 347369 347369 2 Fier AL007D 487970 11.48 97594 97594 3 Elbasan AL006D 424360 9.99 106090 106090 4 Lezha AL004D 211234 5.00 52809 52809 5 Shkodra AL001D 332214 7.82 83054 83054 6 Vlora AL011D 371277 8.74 92819 92819 7 Korça AL009D 352452 8.29 88113 88113 8 Berat AL008D 232383 5.47 6281 6281 9 Dibra AL003D 179291 4.22 44823 44823 10 Gjirokastra AL010D 157386 3.70 39347 39347 11 Kukës AL002D 109385 2.58 27346 27346 Territory of Albania 4247426 100.00 985643 985643

Tab. 18 Needs for decoders

Note: The above table data may be reviewed after the launch of census data.

The needs for decoders shall be planned according to the “digital islands” shown in the above table. Analogue broadcastings in a certain area should be interrupted after all the population (or most of it) is provided with digital receivers. Knowing it is not possible for all families to get decoders

42

within the timeline established for creating “digital islands”, it should be considered giving subsidies for a part of (or all) the population. Table 19 shows some orienting amounts for several subsidizing schemes (100 %, 50 % and 7 %. The last figure represents the number of families in need).

Tab. 19 Required funds for different subsidy schemes (Euro)

Populatio Required funds (ALL) Populatio n No Region Allotment Families n percentag 100% e 50% 77% 34736 135473715 1 Tirana –Durres AL005D 1389474 32.71 9 0 677368575 94831601 2 Fier AL007D 487970 11.48 97594 380616600 190308300 26643162 10609 3 Elbasan AL006D 424360 9.99 0 413751000 206875500 28962570 4 Lezha AL004D 211234 5.00 52809 205953150 102976575 14416721 5 Shkodra AL001D 332214 7.82 83054 323908650 161954325 22673606 6 Vlora AL011D 371277 8.74 92819 361995075 180997538 25339655 7 Korca AL009D 352452 8.29 88113 343640700 171820350 24054849 8 Berat AL008D 232383 5.47 6281 24494424 12247212 1714610 9 Dibra AL003D 179291 4.22 44823 174808725 87404363 12236611 10 Gjirokastra AL010D 157386 3.70 39347 153451350 76725675 10741595 11 Kukes AL002D 109385 2.58 27346 106650375 53325188 57427 Territory of 98564 384400719 192200360 26167240 Albania 4247426 100.00 3 9 0 5

Tab. 20 Required funds for different subsidy schemes (ALL)

Notes:

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1. Chosen average family composition: Persons 4 2. Percentage of families in need: 7 %10 3.Suppopsed price of one decoder: (€) 30

The decoders to be subsidized must be universal and have the basic characteristics to provide the receiving of standard TV signals.

2.11.3 Costs for public awareness on digitalisation

1. Publicity spots 2. Special TV programmes 3. Announcements 4. Questionnaire (for the public)

Lekë. 183 350 760. 00 ANNUAL COST FOR PUBLIC INFORMATION Euro 1 348 168.00

1. Digitalisation spots expenditures

Amount No. of Spots per Amount Entities ALL/spot Spots per year (Euro) entities day (Lekë) (€) National TV 13600 3 12 4380 59568000 National radio 6800 3 12 4380 29784000 Local TV (Tirana) 8160 20 8 2920 23827200 Local TV 2720 60 10 3650 9928000 Local Radio (Tirana) 2040 35 10 3650 7446000 Local Radio 680 30 8 2920 1985600 Total 132538800 974550

Tab. 2.1 Expenses for TV spots on digitalisation

2. Expenses for special TV programmes

No. of Amount Amount No. of Amount Amount Entities programmes per (Lekë) entities (Lekë) (Euro) per year program National 12 100000 1200000 3 3600000 TVs

10 Percentage of families in need is determined based on the number of families receiving economic aid, which at the moment 99000 in the entire country. 44

Local TVs 6 50000 300000 80 24000000 National 8 60000 480000 3 1440000 radios Local radios 4 30000 120000 65 7800000 270882.352 2100000 36840000 Total 9

Tab. 2.2 Expenses for special TV programmes

3. Expenses for announcements

No. of Value of No. Announcem Amount Entities announcements Allotments announceme of entities ents price per allotment nts National 450 3 11 14850 1360 20196000 TVs Local TVs 270 8 1 2160 680 1468800 National 450 3 11 14850 408 6058800 radios Local radios 270 6 1 1620 136 220320 Total in 33480 Lekë 27943920 Total in Euro 214953.23

Tab. 2.3 Expenses for announcements

Note: The announcement will start daily 3 months before the transfer of each allotment

The announcement will be made in local media (respective allotment) and national.

In the framework of the adoption of the Digital Broadcast Transference Strategy, it may be decided that the fees of spots and respective announcements may be reduced (or even free) as an obligation of existing operators regarding the digitalisation of radio television broadcast.

4. Public survey The financial needs for the public survey have not been defined

2.12 Proposals for the improvement of the legal framework

2.10 Amendments of the new date for the closure of digital broadcast. 2.11 Amendment of the way of licensing of national digital networks and radio television programs supported by them. 45

2.12 Amendment of the way of licensing of the local digital networks and radio television programs supported by them. 2.13 Sanctioning of the structure for public information.

Note: The draft law on Audiovisual media lacks only the sanctioning of the public information structure.

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III - IMPLEMENTATION OF THE IMMEDIATE OBJECTIVE

The switch off of the analogue broadcastings

In order to facilitate the process of complete digital switchover, the process will be carried in stages, as follows:

3.1. Set up of the public operator’s digital network

MUX 1 : National public network (fig. 2)

Fig. 3.1 MUX 1 Digital network of RTSh

47

Configuration: Combined network (national and local) composed of:

MUX 1.1 - SFN Network Shkodra. Head End in Shkodra. SFN frequency will be defined by the NCRT based on the digital frequencies plan for the allotment AL001 D, of Shkodra (GE 06). MUX 1.2 – SFN Network Kukës. Head End in Kukës. SFN frequency will be defined by the NCRT based on the digital frequencies plan for the allotment AL002 D of Kukës (GE 06). MUX 1.3 - SFN Network Dibra. Head End in Dibra. SFN frequency will be defined by the NCRT based on the digital frequencies plan for the allotment AL003 D of Dibra (GE 06). MUX 1.4 - SFN Network Lezha. Head End in Lezha. SFN frequency will be defined by the NCRT based on the digital frequencies plan for the allotment AL004 D of Lezha (GE 06). MUX 1.5 - SFN Network Tirana. Central Head End in Tirana. SFN frequency will be defined by the NCRT based on the digital frequencies plan for the allotment AL005 D of Tirana (GE 06). MUX 1.6 - SFN Network Elbasan. Head End in Elbasan. SFN frequency will be defined by the NCRT based on the digital frequencies plan for the allotment AL006 D of Elbasan (GE 06). MUX 1.7 - SFN Network Fier. Head End in Fier. SFN frequency will be defined by the NCRT based on the digital frequencies plan for the allotment AL007 D of Fier (GE 06). MUX 1.8 - SFN Network Berat. Head End in Berat. SFN frequency will be defined by the NCRT based on the digital frequencies plan for the allotment AL008 D of Berat (GE 06). MUX 1.9 - SFN Network Korça. Head End in Korça. SFN frequency will be defined by the NCRT based on the digital frequencies plan for the allotment AL009 D of Korca (GE 06). MUX 1.10- SFN Network Gjirokastra. Head End in Gjirokastra. SFN frequency will be defined by the NCRT based on the digital frequencies plan for the allotment AL010D of Gjirokastra (GE 06). MUX 1.11 - SFN Network Vlora. Head End in Vlora. SFN frequency will be defined by the NCRT based on the digital frequencies plan for the allotment AL011D of Vlora (GE 06).

Note:

 In the main town of each of the allotments a head end will be installed under the administration of RTSH which shall comprise all the local programs. RTSH is charged with ensuring suitable premises for the installation of all Head Ends in all regional centres. It is estimated that the instalment of the Head Ends in the allotment centres (total of 11 Head Ends) will increase investments for the establishment of the first RTSH digital terrestrial network at the extent of 15-20% compared to the amount calculated in Table 9 (The budget for the establishment of the national digital

48

network). The connection of the head end with the local operators’ studios shall be done by the operators themselves.  All local head ends (of the allotments) shall connect to the central RTSH head end in Tirana to enable the national distribution of two or more programs of the public operator.

The concept of 11 MUX-s as a unity enables the support of the public broadcaster, its own local programs and private programs on the national network (see fig. 2).

The network set up technology shall be the same as for the other networks that will be set up in Albania. It will be chosen among the most recent ones which allow for maximal utilization of the frequency spectrum.

The set up will be done respecting the order and the timeline set for one allotment after the other (the digital islands method) until full coverage of the Albanian territory (11 allotments). The order of implementation of the digital islands will be approved by the ad-hoc committee on digital switchover strategy.

MUX 1 will support at least 3 national programs of the public operator and, against payment, all the existing local private programs licensed by the NCRT included in the given allotment.

All programs supported on this network will be broadcasted free-to-air for the public.

Once the set up of the network in a given allotment is over, after a short trial period (1 month), the analogue broadcastings of the public operator and the local private operators covering the area of the respective allotment, will be switched off.

In order to switch off the analogue broadcastings in Tirana-Durrës area and in Vlora Region, where the number of the existing local analogue operators exceeds the digital network capacity, there will be obligations imposed (even temporary ones) on national private operators defining a minimal number of free-to-air programs for the public to this end. These programs will be supported on private networks with the same conditions (including the economic ones) as well as programs that will be supported on the public operator network.

The subvention of the decoders will be done in compliance with the implementation plan, calculating the time necessary to proceed to the analogue switch off deadline.

3.2 Establishment of national private digital networks

The establishment of national private digital network shall at the same time serve both the immediate objective (full switchover to digital broadcasting) and the other main objectives which are:

a. Offering additional capacities in order to increase variety and plurality of programs. b. Introduction of new media technologies and services (HD TV, DVBT H, interactive services, etc).

49

3. 2.1 MUX 3: National private digital network

Fig. 3.2 MUX 3, MUX 4, MUX 5 - National private digital networks

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Configuration:

Network 11 SFN with an head end office in Tirana.

SFN 3.1 Shkodër. SFN 3.2 Kukës. SFN 3.3 Dibër. SFN 3.4 Lezhë. SFN 3.5 Tiranë. SFN 3.6 Elbasan. SFN 3.7 Fier. SFN 3.8 Berat. SFN 3.9 Korçë. SFN 3.10 Gjirokastër. SFN 3.11 Vlorë.

The SFN frequencies are assigned by the NCRT based on the digital frequency plan fort he respective allotment (GE 06). Licensing from the NCRT In case the licensing of the existing operators according to the "beauty contest" principle fails, the NCRT shall organize the competition of the nominations.

3.2.2 MUX 4 : National private network

 Configuration:

Network 11 SFN with an head end office in Tirana.

SFN 4.1 Shkodër SFN 4.2 Kukës SFN 4.3 Dibër SFN 4.4 Lezhë SFN 4.5 Tiranë SFN 4.6 Elbasan SFN 4.7 Fier SFN 4.8 Berat SFN 4.9 Korcë SFN 4.10 Gjirokastër SFN 4.11 Vlorë

The SFN frequencies are assigned by the NCRT based on the digital frequency plan fort he respective allotment (GE 06). Licensing from the NCRT

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In case the licensing of the existing operators according to the "beauty contest" principle fails, the NCRT shall organize a competition among the candidates.

3.2.3_MUX 5 : National private network

 Configuration:

Network 11 SFN with an head end office in Tirana.

SFN 5.1 Shkodër SFN 5.2 Kukës SFN 5.3 Dibër SFN 5.4 Lezhë SFN 5.5 Tiranë SFN 5.6 Elbasan SFN 5.7 Fier SFN 5.8 Berat SFN 5.9 Korcë SFN 5.10 Gjirokastër SFN 5.11 Vlorë

The SFN frequencies are assigned by the NCRT based on the digital frequency plan fort he respective allotment (GE 06).

Licensing from the NCRT. In case the licensing of the existing operators according to the "beauty contest" principle fails, the NCRT shall organize a competition among the candidates.

MUX 3, MUX 4, and MUX 5 can be licensed according to an agreed schedule (one after the other), or at the same time.

 Programs:

The programs that will be supported on national private networks shall be licensed by the NCRT. During the licensing the NCRT shall consider the ratios defined in the law for the free-to-air and the encrypted programs. A program licensed by the NCRT shall be considered either local, regional or national depending on the network where it is supported (local, regional or national).

The national private operators may be imposed obligations for supporting a limited number of programs of the existing local analogue operators (especially of Tirana- Durrës area). The broadcasting of the existing local operators shall be carried out in the same conditions and with the same fees as the programs which will supported in the public operator's network.

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IV - INTRODUCTION OF NEW MEDIA TECHNOLOGIES AND SERVICES (HD TV, DVBT H, INTERACTIVE SERVICES, ETC)

OFFERING ADDITIONAL CAPACITIES IN ORDER TO INCREASE THE VARIETY AND PLURALITY OF PROGRAMS

4.1. Extending the broadcasting capacities of the public operator

4.1.1 - MUX 2: National public network

4. 1.2 - Configurations

Network 11 SFN with an head end office in Tirana, composed of:

SFN 2.1 Shkodër. SFN frequencies are defined by the NCRT based on the digital frequency plan for Shkodra allotment AL001 D, (GE 06). SFN 2.2 Kukës. SFN frequencies are defined by the NCRT based on the digital frequency plan for Kukës allotment AL002 D (GE 06). SFN 2.3 Dibër. SFN frequencies are defined by the NCRT based on the digital frequency plan for Dibra allotment AL003 D (GE 06). SFN 2.4 Lezhë. SFN frequencies are defined by the NCRT based on the digital frequency plan for Lezha allotment AL004 D (GE 06). SFN 2.5 Tiranë. SFN frequencies are defined by the NCRT based on the digital frequency plan for Tirana allotment AL005 D (GE 06). SFN 2.6 Elbasan. SFN frequencies are defined by the NCRT based on the digital frequency plan for Elbasan allotment AL006 D (GE 06). SFN 2.7 Fier. SFN frequencies are defined by the NCRT based on the digital frequency plan for Fier allotment AL007 D (GE 06). SFN 2.8 Berat. SFN frequencies are defined by the NCRT based on the digital frequency plan for Berat allotment AL008 D (GE 06). SFN 2.9 Korcë. SFN frequencies are defined by the NCRT based on the digital frequency plan for Korça allotment AL009 D (GE 06). SFN 2.10 Gjirokastër. SFN frequencies are defined by the NCRT based on the digital frequency plan for Gjirokastra allotment AL010D (GE 06). SFN 2.11 Vlorë. SFN frequencies are defined by the NCRT based on the digital frequency plan for Vlora allotment AL011D (GE 06).

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The extension of broadcasting capacities of the public operator shall begin after completing the set up of the first network (at the finalization of the full switchover into digital broadcasting) and the definition of the optimal number of programs which will be considered valid for fulfilling the mission of the public operator. At this stage the needs for new services of the public operator (HD, interactive services, etc.) shall be defined.

The set up of MUX 2 may be partially implemented for Tirana – Durrës region since the first stage (see point a), in order to complete the capacities of MUX 1 for supporting the existing analogue operators.

4.2 - The establishment of local private networks

4. 2.1 - 11 local MUX-s (MUX 6.1 up to MUX 6.11)

54

Fig.4 MUX 6.1 up to 6.11 –Local private digital networks

4.2.2 Configuration

Head end in the centre of each allotment

MUX 6.1 - SFN Network Shkodër. SFN frequencies are defined by the NCRT based on the digital frequency plan for allotment AL001 D, Shkodra (GE 06). MUX 6.2 – SFN Network Kukës. SFN frequencies are defined by the

55

NCRT based on the digital frequency plan for allotment AL002 D, Kukës (GE 06). MUX 6.3 - SFN Network Dibër. SFN frequencies are defined by the NCRT based on the digital frequency plan for allotment AL003 D, Dibra (GE 06). MUX 6.4 - SFN Network Lezhë. SFN frequencies are defined by the NCRT based on the digital frequency plan for allotment AL004 D, Lezha (GE 06). MUX 6.5 - SFN Tiranë. SFN frequencies are defined by the NCRT based on the digital frequency plan for allotment AL005 D, Tirana (GE 06). MUX 6.6 - SFN Network Elbasan. SFN frequencies are defined by the NCRT based on the digital frequency plan for allotment AL006 D, Elbasan (GE 06). MUX 6.7 - SFN Network Fier. SFN frequencies are defined by the NCRT based on the digital frequency plan for allotment AL007 D, Fier (GE 06). MUX 6.8 - SFN Network Berat. SFN frequencies are defined by the NCRT based on the digital frequency plan for allotment AL008 D, Berat (GE 06). MUX 6.9 - SFN Network Korcë. SFN frequencies are defined by the NCRT based on the digital frequency plan for allotment AL009 D, Korça (GE 06). MUX 1.10- SFN Network Gjirokastër. SFN frequencies are defined by the NCRT based on the digital frequency plan for allotment AL010D, Gjirokastra (GE 06). MUX 6.11 - SFN Network Vlorë. SFN frequencies are defined by the NCRT based on the digital frequency plan for allotment AL011D, Vlora (GE 06).

Licensing by the NCRT through the competition of candidacies. The existing analogue operators (licensed by the NCRT until 2009) may obtain a local license without competition, if they make an agreement between them for building and using a local network.

The programs that will be supported on local private networks shall be licensed by the NCRT. During the licensing the NCRT shall consider the ratios defined in the law for the free-to-air and the encrypted programs. If a program is supported on more than one network (including also the cable or satellite networks), its category (local, regional or national) shall be defined by the network with the wider geographical reach.

4.3. Regional Operators

4.3.1 Regional operators, digital network

The regional operators of the digital networks shall be licensed by the NCRT to cover more than one region. Their number and the relevant areas of licensing shall be decided by the NCRT after the assessment of the needs of the media market. Once the decision about the number of

56 operators has been taken, the NCRT organizes the competition of the candidates for the establishment of regional networks. The use of VHF frequencies band, which are part of the national plan of digital frequencies (GE 06) is recommended for the establishment of regional operators.

Fig. 3.4 MUX 8.1 until 8.8 – Private regional analogue networks

Configuration

SFN, 2 SFN or 3 SFN networks with head ends installed in the centre of the region. Labelling them as MUX 8.1, MUX 8.2, etc.

4.3.2 Regional programme operators (Regional Audio-visual Service Provider) 57

Regional programs can be supported by the regional digital networks. The programs that shall be based on the local private networks shall be licensed by the NCRT. The NCRT shall consider the ratios set forth in the law during the licensing for the free to air and encrypted programs. If a program is supported by more than one network (including the cable or satellite networks) its category (local, regional or national) shall be determined by the network that has the largest geographical dimensions.

V - The order of implementation

5.1 Stage I

5.1.1 Establishment of MUX 1

5.1.1.1 Establishment chart

The establishment of the digital network of National TV stations, according to the availability of funding may be planned to be achieved in one or several years. The use of the digital islands method allows planning for the establishment in stages, combined with the close down of the analogue broadcastings. This method is beneficial as it rationalises the investments and performs a step by step close down of analogue broadcastings. During the first stage, it shall be aimed to have the digital signal cover more territory than or equal territory with the analogue signal coverage from each of the existing analogue operator.

During the first stage it shall be aimed to have the digital signal cover more than 90% of the population.

5.1.1.2 Digitalisation time-frames

The switchover to digital broadcasting shall be slower than the establishment of MUX 1 network, for proper time shall be needed to inform the public and equip them with decoders. The following table (Tab.6) presents a variant of the calculation of the time for the full switchover to digital broadcastings of a certain allotment. This table does not take into consideration the procurement time for the establishment of the network which may take from 4 to 6 months.

Network Switchover Close down of Network establishment to the digital analogue testing time platform broadcastings (Months) (Months) (Months)) (Months) 2 1 1 2

Tab 2.4 Digitalisation time-frames

1. Network establishment time is the time needed for the technical establishment of the network, and it includes the adaptation of the premises and existing towers in the existing transmission points, the installation of the main transmitters and relevant systems, etc. 58

2. Testing is the time when various tests shall take place to check the performance of the established network and its handover for use. 3. The switchover to the digital platform is the time needed to support the existing analogue broadcasters into the digital platform, without interrupting the analogue broadcastings through their existing analogue networks. 4. The close down of the analogue broadcastings is the time needed for the interruption of analogue broadcastings in a certain allotment. It is necessary to equip all viewers with digital receivers (decoders or TV receivers with incorporated decoders) in order to succeed in this process, as this would ensure that programs which were previously received in an analogue manner shall continue to be received during the switchover.

(Tab. 25) below has been based on the digitalisation time-frames (Tab.6). It presents timeframes for the switchover to digital broadcastings in all the territory of the Republic of Albania, allotment after allotment. The table also includes a proposal on the order of the switchover starting with Tirana. As it can be seen, the criterion for the digitalisation switchover is the percentage of the population (The digitalisation starts from the area with the biggest population – Tirana – Durrës – and ends with the area, which has the smallest population – Kukës.)

Cover The implementation of digital islands age Populatio Start time No. Area Families (% of n (%) in popul months ation) R.Tiranë – 1 32.71 347369 85 R.Durrës 0 2 3 4 6 2 Fier Region 11.48 97594 85 3 5 6 7 9 Elbasan 3 9.99 106090 85 Region 6 8 9 10 12 4 Lezha Region 5 52809 85 9 11 12 13 15 Shkodra 5 7.82 83054 85 Region 12 14 15 16 18 6 Vlora Region 8.74 92819 85 15 17 18 19 21 7 Korça Region 8.29 88113 85 18 20 21 22 24 8 Berati Region 5.47 6281 85 21 23 24 25 27 9 Dibra Region 4.22 44823 85 24 26 27 28 30 Gjirokastra 10 3.7 39347 85 Region 27 29 30 31 33 11 Kukës Region 2.58 27346 85 30 32 33 34 36 Territory of 100 985643 85 Albania Implementati 0 2.67 2.75 2.83 3.00 on in years Tab. 25 Time frames for the full switchover to digital broadcastings (MUX 1).

Table 25 determines the time frames needed to carry out each of the processes required to close down the analogue broadcastings in each of the allotments. As it can be seen from this table, the time needed for a full switchover to digital broadcastings is 3 years. This time frame stretches

59 beyond the time frame provided in the existing legislation on digital broadcasting, according to which the close down must be affected until 2012. At the same time this time frame remains within the deadline set in the GE 06 Agreement (2015).

The deadline for the full switchover could be reduced if:

- The viewers shall be equipped 100 % with decoders within the time frame set for the digital switchover of each of the allotments; - The support to switch the existing analogue operators into the MUX 1 platform shall be done in a timely fashion and without financial problems; - The full financing for the establishment of MUX 1 shall be ensured in time; - Among the criteria for the winners that shall be selected to provide the broadcasting equipment, the maximum points shall be given to those who deliver within the shortest time.

5.1.2. The establishment of MUX 3, MUX 4, MUX 5 (National Private Networks)

During the licensing process of the national private operators’ networks, the NCRT shall set forth the prerequisites for the harmonization of the establishment of these networks in conformity with the plan for the close down of existing analogue broadcastings. During the establishment of the network the private operators may speed up their work, but they must respect the order set for the digitalisation of every allotment.

High definition broadcasting (HD) shall be made possible also to the national private networks.

5.1.2 Establishment of MUX 3, MUX 4, MUX 5 (National private networks)

During the licensing of the national private operator networks, NCRT will set forth conditions for the harmonisation of the establishment of these networks in compliance with the switch off plan of the existing analogue broadcasting. The private operators may accelerate the establishment during the network's implementation, but they should respect the order of the digitalisation of each allotment.

The national private networks will enable also HD broadcasting.

5.2 Stage II

5.2.1 Establishment of MUX 6.1 to 6.11 (local networks)

With the support of the programs of the existing operators in the RTSH platform (MUX1), and the close down of their analogue networks, the frequencies taken by them shall be available, some of which are part of the digital frequencies plan. The freed spectrum creates the conditions for the licensing of local digital platforms, in which new local programs shall be based.

The switchover to local platforms of existing programs, which during the first stage shall be based on the public broadcaster’s network, is not excluded as well, provided that the local platforms’ offer is more attractive.

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The increase of the broadcasting capacities as a result of the establishment of local platforms shall create the possibility to include the high definition (HD) broadcastings in the local platforms, as well as in the MUX 1 of the Public Broadcaster.

5.2.2 The establishment of regional networks (MUX 8.1 etc)

As e result of the freeing of the spectrum from analogue broadcastings, the regional platforms (that shall cover more than a region) may be licensed simultaneously with the local platforms, by using the coverage planned in the VHF band.

5.3 The decision to use back-up coverage

After the exhaustion of the broadcasting capacities of the 7 national coverages described above (for the establishment of the networks of the Public Broadcaster, in conformity with the developments of the electronic media market in Albania, as well as the radio and TV broadcasting technologies, the NCRT shall set the way of use, the technology and licensing method of the MUX 7 network which is left as back-up.

VI - The Digital Dividend

6.1 The use of the digital dividend for other telecommunications’ services.

In Europe the switchover to digital terrestrial broadcasting by the end of 2012 shall free a considerable amount of spectrum, resulting from a more efficient digital technology. This spectrum is known as “the digital dividend”.

The digital dividend is considered as a unique opportunity to meet the rapidly increasing demand for wireless communications services. It opens sufficient spectrum for the broadcasters so that they can expand and develop their services considerably, while ensuring at the same time that other important social and economic applications, such as broadband applications, are put into use.

In Albania, at present there are analogue broadcastings, existing digital broadcastings and channels planned for digital broadcasting according to the GE 06 plan, in the band foreseen for the Digital Dividend. The main problem is the re-planning of digital broadcastings in lower bands of frequencies, so as not to decrease the broadcasting capacities agreed for in the GE 06 plan. For this purpose, coordination with neighbouring countries must be planned and the registration of about 13% of total frequency allocations planned in the GE 06 must take place. Only after the migration of these frequency allocations to lower bands of frequencies (470 – 790 MHz) is achieved the use of the DD (790 – 862 MHz) band for broadband applications, which are more advantageous for the economy, may start. Therefore, the soonest the full switchover and the re-allocation to lower bands take place, the soonest the DD spectrum shall be freed.

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7. PAYMENTS OF LOCAL PRIVATE OPERATORS FOR THE TVSH NATIONAL DIGITAL NETWORK

Since existing analogue operators shall be supported in the RTSH digital network according to the market rules, RTSH should receive a profit. The profit rate shall be 30%. Considering also taxes, the RTSH annual income generated by supporting third parties with its digital network shall be:

Name Leke Euro Annual expenses 14059906 108153.1 Planned return (profit) (30%) 1405991 10815.31 Income tax (10%) 1405991.00 10815.31 Total of annual income of public operator (for 1 allotment) 15465896 118968.4

Tab. 26 Annual incomes to be generated by supporting third parties with the RTSH network

7.1 Calculation of the payment for MUX (MPEG 4) support

Assuming that each allotment in the RTSH network shall support approximately 12 local operators, the total income shall be divided by 12 in order to determine the fee to be paid by each local operator:

Name Leke Euro TV program operators 12 5 194 Annual payment per operator 354.00 39 957.00 Monthly payment 432 862.00 3 330.00

Tab. 27 Calculating payment for support in MUX (MPEG 4)

The above reasoning does not take into consideration the expenses that the RTSH will have to make to operate its channels, which will be supported by the same digital network.

Thus, the average annual expenses for supporting local programs in one allotment of the public operator would be about 40 000 Euro or 5.2 million ALL, which corresponds to a 3 400 Euro or 433 000 All monthly payment.

Such estimation is made without taking into consideration some factors, which are crucial in determining the market value, like the service area, actual size of the existing operators, etc.

7.2 Financial situation of some existing TV operators

In order to enable a swift switchover to the digital broadcasting, it is crucial to determine the payment ability of the existing analogue operators that will be supported by the digital platform. In order to determine operators' payment ability, we have taken into consideration the following operators (Tab. 18), for whom we have the data available. 62

Income Expenses (Thousand (Thousand No. Type District lekë) lekë) Television 2275531 2150344 1 TV Telesport Tiranë 28937 28412 2 TV Tele 1 Tiranë 2402 3 TV Tirana 2000 Tiranë 5082 5306 4 TV Kopliku M.Madhe 4242 3829 5 TV BBF Tiranë 22186 21399 6 TV Planet (Calvin) Tiranë 11150 10717 7 TV Lezha Lezhë 6894 6377 8 TV Berati Berat 865 734 9 TV Supersonic Tiranë 6291 5593 10 TV Star Tiranë 2450 11077 11 TV Scan (ATN 1) Tiranë 36152 34637 12 TV Club Tiranë 12415 10050 13 TV Rozafa Shkodër 46212 3896 14 TV Vizion + Tirane 459982 469000 15 TV Channel 7 Gjirokastër 4830 4320 16 TV Top Channel Tiranë 1320413 1269258 17 TV Puka Pukë 2100 1747 18 TV UFO Durrës 7540 6730 19 TV Blue Sky Shkodër 1799 1604 20 TV Lobi Korçë 2750 3717 21 TV Apollon Fier 8122 6472 22 TV ORA Tiranë 74959 68342 23 TV News 24 Tiranë 200524 164689 24 TV AVN Fier 4115 3995 25 TV Margit Lushnje 1920 1774 26 TV 4+ Lushnje 3601 5267

Tab. 28 Financial situation of some existing TV operators

Since it is not possible to gather detailed data on expenses, the total annual amount of expenses is compared to the total annual payment, mentioned above, for the support by digital platforms. It is evident that this comparison has simply orienting purpose because the current expenses of operators include, in addition to the maintenance expenses, other types of expenses. The situation is as follows:

7.3 Operators with expenses lower than 5.2 million All per year

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Income Expenses No. Name District (thousand (thousand lekë) lekë) 1 TV Tele 1 Tiranë 2402 2 TV Kopliku M.Madhe 4242 3829 3 TV Berati Berat 865 734 4 TV Rozafa Shkodër 46212 3896 5 TV Channel 7 Gjirokastër 4830 4320 6 TV Puka Pukë 2100 1747 7 TV Blue Sky Shkodër 1799 1604 8 TV Lobi Korçë 2750 3717 9 TV AVN Fier 4115 3995 10 TV Margit Lushnje 1920 1774

Tab.29 Operators with expenses lower than 5.2 All per year

Note: The table above is compiled using the data available, and it is not exhausting. There may be other operators in the market with less income and expenses.

7.4 Operators with expenses up to double the 5.2 million lekë per year

Income Expenses No. Name District (thousand (thousand lekë) lekë) 1 TV Tirana 2000 Tiranë 5082 5306 2 TV Lezha Lezhë 6894 6377 3 TV Supersonic Tiranë 6291 5593 4 TV Club Tiranë 12415 10050 5 TV UFO Durrës 7540 6730 6 TV Apollon Fier 8122 6472 7 TV 4+ Lushnje 3601 5267

Tab. 30 Operators with expenses up to double the 5.2 million lekë per year

7.5 Operators with expenses more than double the 5.2 million All per year

Income Expenses No. Name District (thousand (thousand lekë) lekë) Televisions 2275531 2150344 64

1 TV Telesport Tiranë 28937 28412 2 TV BBF Tiranë 22186 21399 3 TV Planet (Calvin) Tiranë 11150 10717 4 TV Star Tiranë 2450 11077 5 TV Scan (ATN 1) Tiranë 36152 34637 6 TV Vizion + Tirane 459982 469000 7 TV Top Channel Tiranë 1320413 1269258 8 TV ORA Tiranë 74959 68342 9 TV News 24 Tiranë 200524 164689

Tab.31 Operators with expenses higher than double the 5.2 million lekë per year

7.6 Classification of operators according to their annual expenses

Table 32 presents the % of expenses according to paragraphs 5.4.1, 5.4.2, and 5.4.3

No. Name % 1 Operators with expenses less than 5.2 million lekë per year 39 2 Operators with expenses double the 5.2 million lekë per year 27 Operators with expenses more than double the 5.2 million lekë 3 34 per year

Tab 32 Classification of operators according to their annual expenses

The data provided in Table 22 above shows that 39 % of the existing local operators can not afford supporting the public operator (MUX 1), while 34 % of them are clearly able to afford such expenditures even though they will have to pay more as they cover several allotments.

It looks like about 50-55 % of the existing operators can afford the estimated payment for supporting MUX 1. The rest of the operators might need some support in terms of payment facilitation at least for the first years, in order to stimulate digital switchover.

7.7. Proposals about payment facilitation for supporting existing operators through the public television digital network.

As it is shown above, not all existing analogue operators will be able to afford the payment for getting the support by the public television network. In order to encourage their support in the digital platform, the following facilitation is suggested to be applied:

7.7.1. Payment differentiated according to the licensing area

It is clear that the licensing areas of television operators are not equally attractive to business. The most attractive areas include Tirana – Durrës, Western Albania, and Korca – Elbasan. The 65 other areas are considered difficult. Such a differentiation should also be reflected on payment for support by the digital platform. The table below shows the coefficients, which will make such differentiation possible. (Tab 33).

Licensed Tirane- Western The rest area Durres Albania, Korca Coefficients 2 1.5 0.5

Tab33 Payment coefficients per licensed area

The coefficients above are reflected on operator's monthly and annual payments (Tab 34).

Western Payment for 1 allotment per Tirane- The Average Albania operator Durres rest Korca Coefficient 2 1.5 0.5 Operators (%) 30 40 30 Annual payment per operator 5 200 10 400 7800000 2600000 (Eur) 000 000 Annual payment per operator 40000 80 000 60 000 20 000 (Euro) Monthly payment per 433 333 866 667 650 000 216 667 operator (Leke) Monthly payment per 3 333 6 667 5 000 1 667 operator (Euro)

Tab 34 Payment for support by the digital network of the public television per licensed areas

7.7.2. Reduced payment for the first year.

The NCRT is obliged to facilitate the transition of existing operators into the digital platform. The first switchover year will be the most difficult year for all the operators, as, besides others, they will also have to spend on the existing analogue network during the simulcast period. It is therefore proposed that payment for digital support on the first year be reduced to half of the estimated payment. In the coming years, operators, especially those with a limited coverage (one district or one city) shall benefit from the expansion of their licensed area (which is going to be one region), improving thus also their economic situation.

Application of a reduced payment for the first year will decrease the income of the public operator for that year. This fact should be taken into account while calculating the self-payment of MUX 1. State subsidy (or from other donors) would be an alternative solution for the difference, in order not to affect the deadlines of the investment's self-payment.

Table 35 below presents the payments as per this proposal. 66

Western Payment for 1 allotment per Tirane- Average Albania, The rest operator Durres Korca Coefficient 2 1.5 0.5 Operators (%) 30 40 30 Annual payment per operator (Leke) 2600000 5200000 3900000 1300000 Annual payment per operator (Euro) 20000 40000 30000 10000 Monthly payment per operator (Leke) 216666.5 433333.5 325000 108333.5 Monthly payment per operator (Euro) 1667 3333 2500 833

Tab 35 Payment for support by the digital network of the TVSH, reduced for the first year

7.7.3. Payment reduced through the years

If, despite possible adjustments, some operators in remote areas are not considered capable of affording such payment, the NCRT may apply reduced payments through the three first years (or until the end of the licensing period). Such payments might be different each year. There will only a very limited number of operators benefiting from this scheme, and they will be determined by NCRT based on transparent and strict criteria. Even in this case, an alternative solution for the difference would be state subsidy (or from other donors).

If the operator is not able to afford payment even after these three first years (or after the license deadline), that operator will have to leave the electronic media market.

7.7.4. Subsidies

Subsidies could be one option for providing support by the digital platforms.

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ANNEX 1 Why digitalisation Licensing of digital platforms

The Digital Terrestrial Television (DTT) Platform is one of the various digital platforms and introducing it in the country is an issue in many countries which apply various approaches to licensing regulation and models. However, the first question is whether DTT is needed. While satellite or cable TV is already dominant in certain areas, one may think that the spectrum may be used for other services.

But most of the European countries and regions have reached the conclusion that DTT must be an option for costumers. Once this option is chosen, the regulatory framework must be established. Some countries require only certain adjustments to their existing legislation, while others have already established new licensing systems. We should also consider whether the DTT will be regulated differently from other platforms and the reasons for such a decision. Different European countries regulate this sector in different ways.

The different approaches and models of DTT licensing have their own advantages and disadvantages, which the regulator should take into consideration before opting for a certain approach. An approach applied by one country may not be necessarily appropriate for another. The model chosen may also affect other parts of the system. The model known as “gatekeeper” and its different variants is the option chosen by various countries, where the right to decide on digital platform supported content is more or less given to a private entity, or by giving it full liberty to choose, or by offering a good selection of channels to choose from. In other licensing systems regulatory bodies prefer to have control over the provided content. Generally, control over content seems to be a major issue in many states.

Certain countries like Albania have a strong tradition of free to air channels, and some others have traditions of pay TV, which influences the licensing model. If pay TV is allowed, we should also have a business model to determine a licensing model. As a result, we may say that the “gatekeeper” model is an alternative which works for countries, which have a pay TV tradition.

Aspects related with content

When discussing the DTT, people usually tend to focus on the technical details, forgetting about the costumers' perspective. A large number of customers are not really interested in the technology, but focus on content. With a good choice of different platforms, a costumer may choose the best platform in terms of content.

The application of the DTT enables more channels, more content for the customer. According to the pure concept of “gatekeeper”, the regulatory body chooses not to deal with the content, except for certain monitoring issues regulated by the AVMS Directive (Audiovisual Media Services). However, regulatory bodies usually have their opinion of content, which must be offered to customers. This might be about preserving culture or language, or simply a wish for the DTT to have a more costumer-oriented approach. More channels means that companies of programs created in other countries that depend by the local regulators' approach to 'foreign channels'.

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In many countries, DTT means also an opportunity to broadcast not only at the national level, but even at the local/regional level, as the public view does not usually consider smaller broadcasting areas. Therefore, there are difficulties in assessing the demand of the customers or viewing local/regional program services. As a result, a regional broadcaster may face difficulties in finding a business model, as the buyers of commercial spots often use the viewers' opinion when deciding which program they will choose for advertising their goods/services.

The future

Since the first use of the DTT, the technology has been developed from MPEG2 and DVB-T standard into MPEG4 and/or DVB-T2. In a consultative document of June 2009, the European Commission discussed about a European scheme on how to transform the Digital dividend into social benefits and economic growth in Europe. One of the issues relates to the huge expectations of the costumers regarding future developments of television broadcasting services, such as an increased number of programs, an increased quality, such as HDTV or mobile reception. One of the proposed elements is the improvement of the costumer's experience by ensuring high quality standards for the HDTV receivers in Europe. One of the proposed elements is the improvement of the customers' experience by ensuring high standard quality for the HDTV receivers in Europe. Therefore, one of the key actions is to ensure that the compression standards for all the receivers sold after January 2012 are at least as efficient as the MPEG4 (H264/MPEG4 AVC) standard.

The use of MPEG4 and/or DVB-T2 means a more efficient use of the spectrum, but in many cases it shall cause an increase in the costumer's expenses.

Knowing the average time for the decoders' renewal (about 5 to 8 years), the regulatory body must bear in mind the fact that the costumers must be motivated to purchase new decoders or new TV receivers before they decide to undertake the transition to new techniques, otherwise the advantages of the new technologies may not be fully enjoyed.

The DTT platform may be viewed as a replenishment of the other platforms which bear a more limited content, or it may be viewed as a platform that competes with the cable, satellite or IPTV (Internet Protocol Television). In the case of IPTV, HDTV may be considered as essential to maintain the competition among various platforms. After more than 10 years with the DTT, the platform is still discussed from various points of view regarding new interesting issues. Only a few sectors have such a close relation and such a mix of technical issues, costumers and content.

The national administrations prepare the legislation while considering the ITU agreements and regional agreements as well (among the ITU members, agreements in the framework of CEPT and the policies and directives of the EU). The licences for digital broadcasting are issued pursuant to this national legislation. The licensing process varies a lot among countries. In some countries, the license is issued to operators of the network, while in other countries the licenses are issued to the content providers, multiplex operators and network operators. The selection of the applications is sometimes carried out based on auctions, in other cases through comparative tests ("beauty contest"). In most cases the broadcastings of the public operator do not need a license. The costs of the licenses vary considerably from one country to the other. In some cases a payment is required to cover for the licensing process costs, in other cases the payment is effected based on the value of the frequencies' spectrum market.

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Proposal on the ways of licensing the digital networks and services in Albania

Albania has a good tradition of receiving free to air programs through terrestrial analogue broadcasting, which influences in the selection of the licensing model for digital broadcasting, as well. The “gatekeeper” model, where the right to decide about the content supported by digital platforms is given to a private entity is considered as inappropriate for Albania. In analogy with many countries of Europe, in Albania as well, a licensing system is proposed, where the regulator controls the offered content while aiming to fulfil the public mission of electronic media. The following types of licenses are proposed to be applied for purposes of this objective: a) Audio program service license, for offering an audio program service. b) Audio-visual program service license, for offering an audio-visual program service. c) Audio broadcasting license. This license is composed of: i. Audio program service license, pursuant to point a, and ii. License for the establishment and operation of the network, which may be analogue or digital; d) Audio-visual broadcasting license. This license is composed of: i. Audio-visual program service license, pursuant to point b, and ii. License for the establishment and operation of the network, which may be analogue or digital Such a categorisation of licenses creates flexibility to suit any model of business in the audio- visual media market. For example, for analogue broadcasting, it is proposed to issue an analogue audio or audio-visual broadcasting License (points c and d above). Such a license includes the license for program services and the license for the establishment and operation of the analogue network (1 network – 1 program). For digital broadcasting, it is proposed to issue a digital audio or audio-visual broadcasting License. This license includes the license for program services and the license for the establishment and operation of the digital network (1 network – many programs). In order to avoid monopolies and in order to promote pluralism, the operators who will be equipped with a digital broadcasting License (audio or audio-visual) will be allowed to use only 60% of their digital network capacity in order to support their programs. They are obliged to offer available capacities, based on fair, equal, and non-discriminating criteria, to the other operators which do not have a network of their own, but who are equipped with a program service license (audio or audio-visual), pursuant to points a and b above.

The licenses will be categorised into: a) national, when the signal covers not less that 80% of the territory of the country; b) regional, for coverage of up to 4 regions which are in the same geographic stretch; and c) local, for the coverage of one region. The mentioned licenses for services of programs will be national, regional or local to serve the terrestrial network category (analogue or digital), on which these services will be based.

For program services that will be based on networks different from terrestrial networks (analogue or digital), which do not require the use of limited natural resources, it is proposed to

70 issue, without any competition, authorisations for the audio program service and authorisations for the audio-visual program service. These authorisations will be: a. Satellite, when the service is based on a satellite system; b. Cable, when the service is based on a cable system. c. Online service, when the service is based on the Internet; d. Technical service for conditional access systems, e) Service provider, including the conditional access service. The above-listed proposals must be reflected in the new law for the audio-visual media in Albania.

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ANNEX 2

DIGITAL DIVIDEND

A1. INTERNATIONAL ASPECTS

A1.1 Technical elements related to the Digital Dividend harmonisation options

In Europe, the digital switchover at the end of 2012, will free a considerable amount of spectrum as the result of higher efficiency of the digital technology. This spectrum is known as “Digital Dividend” or “White Spaces.” The digital dividend is considered as an unique option to fulfil the quickly increasing demand for wireless communication services. It frees an adequate spectrum for broadcasters in order to broaden and develop their services considerably providing at the same time other important social and economic uses, such as broadband applications. The terms "White Spots," "White Spaces," or “Layered Spectrum” have been used to introduce a frequency spectrum concept that is potentially available in a given period of time to be further used within the frequency spectrum planned in the beginning for the broadcast in GE06 [1]. The available documentation mainly uses the term “White Spaces” and this term will be used in the whole document as a generic name in order to describe all the different cases. The entire available spectrum will be included. These white spaces have a limited duration and geographic expansion and in each use, the protection of approximate Primary Services and other systems (services, applications) allocated on priority basis, that will create obstacles in the operation of applications that use the white space spectrum, should be taken into consideration. This operation in the white space may be carried out only on the basis of non-interference and non-protection. The white space services must be capable to move among alternative channels of the white space in order to avoid the interference with the new operating stations or with other services which have been given a higher priority on national basis. Depending on national and cross-border demands, white space services that enter a band must know that usually other stations may be added, generally broadcasting ones. Thus, the “White Space” is a denomination that shows a part of the spectrum, which is available for a radio-communication application (service, system) in a given time, in a given geographic zone, on a non-interference/non-protected basis, in relation with other services which are of a higher priority on national basis. In its mandate in CEPT on digital dividend, the EC aims at the most flexible possible use of the spectrum, allowing the wider possible technology use interval. As a consequence, in Report A, Report B, and its supplement, CEPT has analysed the forecasted consequences coming from the common partial use of the 470 - 862 MHz band for digital broadcast services, multimedia broadcast and fixed/mobile services. RSPG, in its opinion on “EU Spectrum policy implications of the digital dividend” emphasizes that in order to implement the digital dividend, the Member States may want to consider the impact on other existing services, including here secondary services. Certainly, the implementation of the digital dividend for broadcast and non-broadcast applications may have

72 implications regarding the current existence of other services that occupy the layered spectrum or the “white space” within the 470 - 862 MHz band. These include the radio navigation, fixed or mobile services for military applications, Radio Astronomy and Services Ancillary to Broadcasting and to Program-Making (SAB/SAP, also known in the industry as Program- Making and services of Special Events, or PMSE). Many of these services may be influenced or obstructed by the development of the UHF band. Moreover, in the white spectrum, there are possibilities for new applications that benefit from the favourable physical characteristics of expansion of the UHF spectrum, for example, free passing through walls to enable the applications of the network in the entire house or networks of the area. This chapter is a preliminary observation of the practice of implementation of new/future applications within the white space spectrum in the 470 - 862 MHz band.

A1.2 CEPT

To go beyond the first mandate of the Spectrum Committee of the CoE, to study the technical restrictions faced by the digital dividend, by bearing in mind the approval of a synchronised policy in the European Union, by the end of 2006, the European Conference on Postal and Telecommunications Administrations (CEPT) created the TG4 ECC group. To fulfil its mandate the TG4 aimed to prepare three Reports.

CEPT 21 Report This report addresses the issues of the compatibility between the DVB-T networks for the fixed reception and networks DVB-H (Digital Video Broadcasting - Handheld) for the mobile reception, and the chances of synchronizing a sub-band in the IV and V frequency bands for the DVB-H networks, by resulting that the two kinds of networks are essentially compatible, through the identification of the techniques to solve the possible interferences. The report is not final when it comes to the possibility of synchronizing a sub-band for the DVB-H networks, by pointing out the advantages and disadvantages of the synchronization or not of a sub-band. It also mentions that if a synchronization must take place this must not be obligatory and that its approval is done in accordance with the pertinent country's consideration.

CEPT 22 Report The second report, which in essence deals more closely with the technical feasibility of the synchronization of a sub-band into the IV and V UHF bands for the fixed/ mobile applications by including the uplink, reaches the conclusion that it is possible to achieve, by including at least channels 62 to 69 for as long as the synchronization is not obligatory. This report also reaches the conclusion that it will be practically impossible for a country to use this sub-band for mobile applications without the prior consent of the neighbouring countries, by taking into consideration the interference level produced by the digital introductions of the GE06. It must be mentioned that some European administrations showed a reserve regarding the conclusions of this report, because the sub-band identified in the report is exactly the introduction band of the DTT in these countries, in compliance with the signed international agreements. In fact, the implementation of the DTT in this sub-band was a strategy adopted by some European countries, due to its broader availability, and for its freeing from the military protection

73 and security utilisations, by enabling thus the implementation of the DTT without having to change the radio channels used by the analogue TV.

CEPT 24 Report The final report assesses the possibility of using the spectrum that has not been utilized by the DVB – T (defined as "the white area") for applications or new services in the future. The report draws the conclusion that technology linked with cognitive radios is still in the initial phase, and for this reason defining the requests that will enable its use, which shall always be based on non interference, would be premature. It also draws the conclusion that "white spaces" to a great extent, will continue to be used from broadcasting microphones to make programs and special events (PMSE Programme-making and Special Events), and this must be the main use.

ECC 142 Report This Report offers information and advice for the administrations that cover matters that must be openly discussed and that must be taken into account in an attempt to include mobile/fixed communication networks in the band 790-862 MHz or to use additional sources for broadcasting in the UHF band.

With the conclusions of these reports in mind, by mid 2008, the Spectrum Committee of the CoE gave CEPT a second mandate on the digital dividend. Bearing in mind the prolonged duration of studies, they were divided in three CEPT groups: TG4, SE42, and PT1. Currently, TG4 is being developed:  Instructions for cross-border coordination of the mobile services of a country and broadcasting services of the neighbouring country;  Recommendation to ensure the maintenance of the PMSE equipment that operate in bands of 470-862 MHz in the best possible manner, by including the assessment and advantages of a European level strategy;  Recommendation for a possible re-planning of the radio-diffusion (broadcasting), so that the sub-band 790-862 MHz can be freed;  Setting the protection criteria, to protect the mobile broadcasting service, to aid in situations that coincide.

On the other hand, SE42 is setting the optimised technical conditions to implement fixed and mobile services of electronic communications in the sub-band 790-862 MHz, while considering the co-existence with the actual services, service and radio-diffusion. SE42 is using the BEM (Block Edge Mask) concept to define the technical conditions in this sub- band.

Recently, PT1 is developing the division of the channels for the sub-band 790-862 MHz for the IMT (International Mobile Communications), which on one hand enables the implementation of IMT systems in a considerable level in the European Union, and on the other hand, enables various countries to adopt the way the channels proposed are allocated in accordance with their national realities and needs of the market. Channelling the IMT, developed by the groups, must be compatible with the GE06 agreement.

A1. 3 ITU

The World Radio-communication Conference 2007 (WRC-07) has considered the allocation of new wireless services, respectively for the IMT (International Telecommunications Mobile). 74

This World Conference decided a primary division in RR for the mobile telephony service in the 790-862 MHz sub-band frequencies in accordance with the below-mentioned restrictions. It must be emphasized that part of the same spectrum has been already divided in RR for the broadcasting service (and with a primary Status).

The identification from WRC-07 of the spectrum for the IMT was done through an amendment in note 5.317A of article 5 of the RR, even though it was delayed (that will enter into force in June 17, 2015), as stipulated in note 5.316B.

During the discussion in WRC-07 there was an important debate about note 5.316, Article 5 of RR, a note that existed and made an additional allocation for the mobile service in the 790-862 MHz sub-band.

To put it in a few words, the establishment of the 790-862 sub-band for the IMT in Region 1 offers flexibility for the implementation of other radio-communication services.

The creation of the JTG 5-6 group in the framework of the ITU purpose must be mentioned. This combined group is composed of the study groups SG5 (terrestrial Services) and SG6 (Radio- diffusion Services) so that they can deal with point 1.17 of the agenda of the next world conference (WRC-11). This point requests that studies be conducted for the allocation between the mobile service and other services about which the sub-band 790-862 MHz has been allocated ( radio-diffusion, fixed, mobile and aeronautical navigation services) in Regions 1 and 3, based on Resolution 749 (WRC-07 version).

The Agenda of the World Radio-communication Conference 2012 (WRC 12) foresees in one of its points the consideration of the study results on the division between the mobile service and other services in the 790-862 MHz band in regions 1 and 3, pursuant to Resolution 749 (WRC 07), to ensure an adequate protection of services to which this frequency band has been allocated, and to ensure also that the necessary measures are taken. The Joint European Proposal of CEPT on the items of the agenda related to the service and radio diffusion and fixed services also reads that it must be underlined that in the framework of the European Union (and in other European countries), the 790 – 862 MHz band will be put at the disposal of the mobile services starting from 2013.

A2. APLICATIONS OF POTENTIAL CANDIDATES

There is the potential that other applications use jointly the spectrum of white space. For the layer distribution in UHF band, two categories of devices of short or longer range can be taken into consideration:  Personal/mobile devices, such as Wi-Fi cards for computers, laptops, smart phones, PDA, personal media devices (media players), which operate, for example, with a maximum output of 100 mW.  Fixed/access devices which in general operate from a fixed location and which can be used to have a commercial service, such as broadband wireless internet. These devices can operate, for example, with an output capacity of up to 1 W.

Similar categories of devices operate today in the bands of 2.4 GHz and 5 GHz.

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It must be underlined that sample capacities of the transmitter are comparable or bigger than the alleged ones for mobile applications at the sub-band (21 dBm per UMTS). Consequently, the protection of first users at UHF band will require guard bands and exclusion zones, comparable with those previously studied for the harmonized sub-band.

The industry expressed its interest in using UHF band due to specific conditions of distribution, since it allows a bigger interval than 2.4 GHz or 5 GHz, although it is operated in channel with smaller band width. Every channel of 8 MHz would keep data comparable with those of actual services of broad zones, such as 5 MHz HSDPA, but smaller than the devices 802.11, which operate in channels 20 MHz in 2.4 GHz and 5 GHz. However, the devices of white space can be united with any kind of channels available to gain greater capacity.

Here are some application samples:  Multimedia distribution in the house  WLAN network and bridging with long interval  Self organized networks, community networks and buildings' compounds' networks  Games  Automatization and control in the house  Non-critical monitoring applications

These applications are already offered in other bands of frequencies, different from the UHF spectrum, but the industry wants to exploit specific benefits of this spectrum. The characteristics of superior distribution of UHF enable particularly the connection in a wide interval, supporting in this manner the applications which require distribution of data in real time (multi-media distribution at home, games, etc). On the other side, for the same reason, which is the superior expansion of UHF, the interference generated by new devices of white space towards primary services or other services of priority, is also bigger and will impose several obstacles for the operation of other devices.

The success of shown applications can rely on their capacity to offer alternative services, or to secure additional capacities for other existing solutions, such as devices which actually distribute high capacities of short intervals in the bands 2.4 GHz and 5 GHz, or mobile networks.

A2.1 Flexibility The administrations are fully competent and sovereign in decision-making to decide if the band 790-862 MHz will be used for transmission, mobile service or any other service. This flexibility can be indispensable if an Administration cannot allocate all services which use the band 790- 862 MHz, or for other national circumstances. However, doing such a thing, the Administration might lose the benefits of a usual band plan which includes:  Mass economies for devices affordable by users,  Higher number of alternatives for the service providers and producers of costumers devices;  Minimised risk of radio interference;  Maximised total economic value of the spectrum,  Simplified cross-border coordination and global roaming.

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A2.2 Technologic Neutrality A regulation is technically impartial unless it imposes or discriminates in favour of using a certain type of technology. Technologies (such as LTE and WiMAX) actually facing the needs for distribution in the band 790-862 MHz accept both ways; TDD and FDD. A single band plan for intervals 790-862 MHz (or paired FDD or unpaired TDD) consequently will not discriminate in favour or against one of these supported technologies. Nevertheless, there might be several implementation difficulties if the multi-band terminals need to support a different duplex method in other bands.

A3. GE-06 Structure and the cross-border coordination The second mandate of CEPT finds that “We should take into consideration the main goal of an European coordinated approach, implemented through detailed national decisions on the regulations of frequency, agreeing with the structure GE-06”. Actual measures in the GE-06 Agreement require an administration willing to implement mobile services to attain a preliminary agreement from the administration, present and future service which might be affected by the interference caused by mobile service, but also by obstacles which might raise due to the need to protect the mobile service from interference caused by its present and future transmitting services. The GE-06 structure is part of the report 21, 22 and 29 of CEPT. More over, CEPT is drafting a Report/Recommendation on the re-regulation of transmitting services, in order to have the sub- band 790-862 MHz free.

“Flexibility is an integral part of GE-06. In other words, the Plan does not allow the use of certain frequencies to implement broadcasting services with different characteristics or other applications, with the condition that interference and protection requirements be kept within the envelope of corresponding unit in the Plan. The Administration can modify its units in the Plan by implementing the provisions of Article 4 of Agreement GE-06.

The GE-06 Plan does not allow the determined frequencies (digital units) to be used for other services in the concept of mask of spectrum, as long as they are notified according to the defining envelope of transmitting and do not require more protection, or do not cause interference more than allowed according to GE-06. Consequently, the conclusion is valid, since the agreement GE-06 allows the usage of multi-media mobile applications. It is expected that the harmonized spectrum for these applications will improve their start of operation”

“It should be underlined that the interference level which might be created by the implementation of the units of GE-06 Plan, makes it practically impossible for a country to start using a harmonized sub-band for applications of mobile communications without agreeing with neighbouring countries, underlining that they might not be members of CEPT or BE/EEC in all cases. Consequently, the implementation of this harmonized sub-band will require bilateral or multilateral negotiations, according to the GE-06 Agreement, which are compiled to provide impartial access of the spectrum from all administrations.

The Report 29 of CEPT “The Directives on the issues of cross-border coordination between mobile services in a country and broadcasting services in another one” addresses the cross- border coordination for the band 790 – 862 MHz. The report aims to assist the administrations to decide upon a common methodology for the coordination in the case when a bordering country decides to use the band 790-862 MHz for mobile applications, while the other country wants to keep this band for broadcasting applications. It states:

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“CEPT is of the opinion that the GE-06 Agreement provides for the pertinent regulatory procedures to identify the administrations to be involved in the coordination process between the broadcasting service in a country and telephone mobile service in another country. The identification is conducted through the strength of inciting coordination field. Further on, the CEPT agrees that during bilateral or multilateral discussions, which uses the elements part of the Report 29 of CEPT for the directive, from interested administrations, there might be a need to develop a detailed coordination methodology, including a careful evaluation of interference.

The provisions of GE-06 might not be appropriate for the cross-border coordination between countries members of GE-06 and those who are not part of this Agreement. More over, the issue of coordinating between mole service and services different from transmitting ones (which are ARNS) are not subjected to GE-06 and are not addressed to in the studies to prepare Unit 1.17 of Agenda WRC-12.

A3.1 The Advantages of a preferred regulation of harmonized frequency based on FDD

The CEPT, took into consideration the benefits and risks of having two options (which are FDD and TDD) to regulate the frequency while there is a preferable frequency regulation, and it reached the conclusions that the advantages of a single preferable regulation for this band are:  Reduced development and operating costs for the future radio infrastructure or terminal devices, which will be used in band 790-862 MHz avoiding the fragmentation of CEPT market in this frequency band, which might happen with a inappropriate regulation of frequency. Focusing on the harmonization of all CEPT on the single frequency plan, based on FDD will be to the benefit of industry and costumers,  Enhanced chances and reduced costs for roaming services within CEPT,  Simplified licensing process,  Market security: Industry needs visibility to launch the development of radio devices, which have to be ready right in time as expected by the future operators licensed in band 790-962 MHz. The appropriate type (FDD or TDD) shall meet the market demands. Today, the industry is unanimously supporting FDD duplex type in this frequency band.

We have to add that CEPT shows that protection of receiving the base station from TV emissions, is quite a bigger challenge than the protection of receiving the terminal. Consequently, regulating the TDD frequency, where the stations are receiving through out the band, constituted a more difficult coordination challenge than FDD in the case when a neighbouring country want to use the band for transmission.

Therefore, CEPT developed a preferable regulation for harmonized frequency, based on FDD manner.

A4. The use of the digital dividend for other services of electronic communications in the Republic of Albania.

There are currently analogue broadcasting, existing digital broadcasting and channels planned for digital broadcasting according to the GE-06 Plan in Albania, in the band foreseen for the Digital

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Dividend. The main problem results to be the re-planning of digital broadcasting in lower frequency bands, so as not to decrease the broadcasting capacities gained through the GE 06 Plan

For this purpose, coordination must be planned with neighbouring countries and the registration of about 13% of total frequency allocations planned by the GE 06 must be done in the GE 06. The use of band DD (790 – 862 MHz) for applications of a broadband, which is more profitable for the economy, may initiate only after the migration of these frequency allocations to lower frequency bands (470 – 790 MHz) has taken place.

The introduction of new electronic communications and the development of digital broadcasting services in the framework of the UHF frequency spectrum have set restrictions when it comes to the use of the digital dividend:  The protection of analogue broadcasting services until the switch-off slows down the process of the digital dividend use;  The use of the digital dividend is generally limited by secondary services used in the UHF band;  Even though the procedures for the modification of the GE-06 Plan provide a suitable framework in which administrations fulfil their requests for future needs, the flexibility offered for administrations to do this, now leads to variations of the needs for spectrum resources, which in a broader sense limit the possibility of use of the harmonised spectrum in the future;  In many countries, the implementation of multi-media mobile services deviates from the configuration of the reference planning in which the GE-06 Agreement has been based;  The engineering of receivers and expenses in the case of multi-media mobile services condition the minimal allocation of frequencies which must be ensured between the frequencies that will be used for the receipt of multi-media content, i.e. downlink and the frequencies that will be used for broadcasting from mobile reception, i.e. uplink;  Regardless of the fact that the GE-06 Agreement provides a set level of flexibility for the administrations by introducing the concept of the spectrum mask, the procedures of the Agreement do not foresee the possibility of notifying about requests for uplink for multi- media mobile services;  The use of uplink for fixed/mobile services in the UHF creates the need to include a protecting band between the frequencies foreseen for the uplink and channels that will be used for digital terrestrial broadcasting. This makes the co-existence of fixed/mobile services difficult and it also brings about the need for coordination. The harmonisation of sub-bands within the UHF band, for the purposes of using them for needs of fixed/mobile services at a European level, and in the level of member countries to the ITU, is the solution that has been proposed by the RSPG group of the European Commission, where the administrations that aim to use the entire UHF band for digital terrestrial broadcasting services may continue in this way;  The harmonisation of the part of the VHF band for the use of uplinks is not suitable due to an inadequate band width.

The following points must be considered for the implementation of the fixed/mobile services in parts of the UHF band:  The technical viability of the harmonisation of the sub-band within the UHF band for mobile use, (including the uplinks), while minimizing the impact on the GE06 Plan; s

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 The proposals of the plan on technical possibilities and scenarios for optimising the digital dividend, including steps during the transition period before the analogue switch- off.

Fixed/mobile services are systems that require two directions, downlink and uplink broadcasting, where the uplink is not covered by the GE06 Agreement, that is that they can not be determined by the spectrum mask implementation of existing entries into the GE06 Plan. However, the technological trends initiate the needs to seek access to parts of the UHF frequency spectrum For services with a broadband fixed/mobile IMT (International Mobile Telecommunication) and WiMAX, considering as below:  Improvements in the quality of broadband services, for example services of a high level of data transmission, with good coverage inside the buildings, particularly in the mostly populated areas;  The extension of the coverage of broadband services in rural areas, covered by the 3G network.

The uplink of fixed/mobile services may cause interference if such services operate in the channels attached to the Digital Terrestrial TV service, also due to the fact that the source of such an intervention is the signal that is broadcast by movable devices, the operators in general are not able to diminish the interference through methods that are usually implemented for fixed services.

Some duties that rise for the NCRT/PECA following the switchover from analogue to digital broadcasting are:  The harmonisation of the digital dividend at a national and European level. Application and implementation of policies and recommendations of the European Union, Group of Radio Spectrum "Benefits for the EU from the use of the digital dividend for mobile applications (including uplinks) in a harmonised UHF sub-band". According to CEPT, the harmonisation is possible from a technical regulatory point of view, and must not be obligatory. The preferred band is 800 MHz and multilateral discussions are necessary for such a harmonisation.

 Re-allocation and study of the frequency bands on which the switchover to Terrestrial Digital Broadcasting has an impact.

 Reflection of such changes, allocation of bands for new services, in the National Frequency Plan and Plan for Frequency Use.

Therefore, the soonest the full switchover to digital broadcasting and re-planning into lower bands takes place, the soonest the digital Dividend spectrum shall be vacant for broadband services.

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ANEKS 3

TECHNOLOGY RELATED ASPECTS

The increase of the demand for information has brought about important developments, which are reflected in a considerable increase in the broadcasting capacity of the terrestrial platform. These developments have to do with improvements in the standards used for the encoding (compressing) of information and in the broadcasting systems.

• MPEG-4 is an improved video and audio compressing standard. This is expected to reach up to twice the capacity of the efficiency of the MPEG-2 compressing standard which has been used for most of the terrestrial digital broadcastings in Europe. This means that a Multiplex (MUX) DTT may support up to twice more programs through the use of MPEG-4 as compared to the MPEG-2 encoding, while ensuring the same visual and audio quality.

• DVB-T2 is a new broadcasting standard, the specifications of which were first published by the DVB Project in June 2008 and were standardised by the European Telecommunications Standards Institute (ETSI) since September 2009.

As compared to the actual standard of the digital terrestrial television, DVB-T, the second generation standard, DVB-T2 ensures a minimal increase of capacity of at least 30% under the equivalent conditions of reception through the utilisation of the existing receiving antennas. However, some preliminary testing has suggested that the increase of the capacity gained in practice may be up to 50%, This may enable the launch in the market of new broadcasting services that enable the intensive use of the frequency capacities, while bearing in mind the available limited spectrum in the VHF and UHF. The DVB-T2 standard facilitates also the services of the other generation such as 3D TV, which may benefit from the increase of the available capacity with this standard. The assessments done found that if these two technologies are combined, it increases the capacity of a Multiplex (MUX) up to 160% for the fixed reception, even though some experts say that 100% is a more realistic assessment. It is presupposed also that the benefits in the capacity in the case of mobile reception will be similar with that of the fixed reception.

The implementation of a DTT DVB-T2 system: • requires various treatments about network planning and may have an impact in the planning of frequencies. Particularly, if the GE06 plan will be used for the DVB-T2 in stead of DVB-T the conditions for this replacement must be well-defined, as well as the implications about interferences, the requests for the coverage protection and parameters must be investigated. • will bring higher costs for the broadcasters and costumers.

The national operators will have to approve joint specifications for the DVBT2 receivers, so that they can benefit from the economy at a national level. This will prevent the fragmentation of the market and will offer to the public access to a broad selection of DVB-T2 decoders with the lowest possible price. This is the reason for which the producers have now started to work to define the requirements of the DVBT2 decoders all over Europe.

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ENCRYPTED SYSTEMS AND COMMON INTERFACE

Encrypting is generally used so to provide a conditional access for the viewers who have the right to receive service and to prevent unauthorised use. The payment or location, for the cases when programs are geographically limited, may serve as conditions for the access. In the majority of cases, access is provided by a smart card. When the customer fulfils the access conditions (meaning the customer is equipped with the right SmartCard and has paid for the requested services) an authorisation signal is transmitted and it is accepted by the smart card leading the customer to have access in the provided services.

Encryption of television signals is a normal practice in many satellite broadcast services. Moreover, in different countries, a part of the program package is encoded and access is given only if subscription is paid.

Problems related to encryption include the fact that each service provider which offers Premium content through pay TV channels may use an encryption code which is different from the others. As a consequence, the customer that wishes to see channels available in more than one platform, which are encrypted differently, will have to purchase a decoder for each encryption system.

This problem can be solved through the so-called “Common Interface,” a set standard which enables the addition of a Conditional Access System (CAS) in a DTV receiver, so to adapt to different types of encryption. Currently, different forms of Conditional Access Systems (CAS) exist in the market, mainly for satellite broadcast, but also applicable in terrestrial digital platforms.

The selection of a CAS is a compromise between the expenditures of the system and security (expected or reported system hacking possibilities). If the use of CAS is selected, it is important to guarantee that:

 It can be incorporated with more than one system (multi-crypt) in case different CAS systems are being used in a country;  Producers and Receivers implement CAS in receivers or set-top boxes, through a Common Interface (CI), a more expensive solution which makes the receiver be independent from the service provider and more flexible.

The common interface allows broadcasters to use modules which include solutions from different suppliers in the same broadcast system, in this way increasing their choices for anti- piracy options.

With the purpose of promoting interaction and encouraging competition in the market, each operator must integrate the Common Interface in its receivers. An improved common interface "CI Plus" has been developed by a big number of producers in order to guarantee an improved operation of protection from copies. CI Plus is expected to become the norm de facto for all TV receivers starting from 2011.

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